Crude ends lower

Prices drop as housing data disappoints

Crude prices dropped on Tuesday, 24 August 2010. Prices fell in tandem with US stocks after housing data checked in worse than expected and once again hinting the pace of global recovery.



On Tuesday, crude oil futures for light sweet crude for October delivery closed at $71.63/barrel (lower by $1.47 or 2%). Last week, crude ended lower by 2.6%.

For the month of July, crude ended higher by 4.5%. Before this, in 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 5%.

In the currency market on Tuesday, the dollar index, which weighs the strength of the dollar against a basket of six other currencies went up by 0.7% initially but then pared its gains and ended almost flat.

National Association of Realtors reported on Tuesday that existing home sales in US plummeted 27% month-over-month to an annualized rate of 3.8 million units. Not only is that far below the 4.7 million units that had been expected, but the rate of decline and the actual sales level were the worst since records began in 1999. Hope for a revival in housing was further dashed with news that the total supply of homes now stands at 12.5 months.

On Tuesday, gasoline for September delivery settled at $1.85 a gallon, gasoline's lowest price since December 2009. As summer, gasoline's peak demand season, draws to a close, supplies are still plentiful.

Natural gas for September delivery, ended for fifth straight session. Natural gas for September delivery retreated 2 cents, or 0.7%, to $4.04 per million British thermal units, posting 13-week lows.

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 September delivery closed lower by Rs 52 (1.5%) at Rs 3,386/barrel. Natural gas for August delivery closed at Rs 189.6, lower by Rs 0.4 (0.2%).