Crude ends substantially lower

Prices drop due to weak consumer confidence report

Crude oil prices ended substantially lower on Tuesday, 27 July 2010 at Nymex. Prices dropped as consumer confidence report once again brought back worries among investors regarding overall economic recovery.



On Tuesday, crude oil futures for light sweet crude for September delivery closed at $77.5/barrel (lower by $1.48 or 1.9%). Earlier during the day, prices rose to a high of $79.69. Last week, crude prices ended higher by 1.3%.

For the month of June, oil prices shed 2.7%. Crude ended second quarter of CY 2010 lower by 9.3%. For the first quarter of this year, crude rose by 5.5%. Year to date, crude is lower by 1.4%.

The Conference Board in US reported on Tuesday, 27 July 2010 that consumer confidence fell in July on concerns about jobs and business conditions. July's consumer confidence index fell to 50.4, the lowest level since February, from an upwardly revised 54.3 in June.

As per the report, consumers' view of current conditions and short-term outlook fell in July. The present-situation index fell to 26.1 in July, the lowest level since March, from 26.8 in June. Those saying present business conditions are "bad" rose to 43.6% in July from 41% in June, while those saying jobs are "hard to get" rose to 45.8% from 43.5%.

The expectations index fell to 66.6 in July, hitting the lowest level since February, from 72.7 in June. Those expecting business conditions in six months to be "worse" rose to 15.7% in July from 13.9% in June, while those expecting more jobs fell to 14.3% from 16.2%, and those expected a decrease of income rose to 17.5% from 16.8%.

In the currency market on Tuesday, the dollar index, which measures the strength of the dollar against a basket of six other currencies, erased earlier losses and rose by 0.1%.

Among other energy products on Tuesday, reformulated gasoline for August delivery, also thinly traded but the front-month contract, retreated 4 cents, or 2%, to $2.06 a gallon.

Also, on Tuesday, natural gas for August delivery, the thinly traded front-month contract, bucked the trend to post gains. The contract added 6 cents, or 1.4%, to $4.68 per million British thermal units.

Crude ended FY 2009 higher by 78%, the highest yearly gain since 1999. It reached a high of $82 earlier in October 2009 and hit a low of $33.98 on 12 February 2009. Crude prices had ended FY 2008 lower by 54%, the largest yearly loss since trading began at Nymex.

At the MCX, crude oil for August delivery closed lower by Rs 83 (2.24%) at Rs 3,624/barrel. Natural gas for August delivery closed at Rs 217.1, higher by Rs 0.6 (0.3%).