Crude gains but natural gas slips

Oil prices end higher for first time in four sessions

Crude oil prices ended higher for first time in four sessions on Monday, 09 August 2010. Prices rose in tandem with US stocks despite a strong dollar.



On Monday, crude oil futures for light sweet crude for September delivery closed at $81.48/barrel (higher by $0.78 or 1%). Last week, crude ended higher by 2.2%.

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 higher by 3.9%.

On Monday, US stocks spent the session in the green, but there was never really a leader among them. Instead, gains were broad and varied. Many point to tomorrow's FOMC decision as a primary reason that traders opted to stay on the sidelines. The consensus is that the FOMC will keep its target interest rate in a range of 0.00% to 0.25%, but many are concerned that the Fed might change the verbiage in its directive.

In the currency market on Monday, the dollar index, which weighs the strength of the dollar against a basket of six other currencies, rose by 0.4%.

Last Friday, The Labor Department in US reported on Friday, 06 August 2010 that total nonfarm payrolls fell by a seasonally adjusted 131,000 in July 2010. The nation's unemployment rate held steady at 9.5%.

But all the lost jobs were temporary jobs at the U.S. Census. Private-sector payrolls rose by an estimated 71,000 in July. The increase in private payrolls was weaker than the 100,000 increase that had been expected by Wall Street. It showed that U.S. employers continued to hire but at a sluggish pace adding to pessimism about the economic outlook.

Among other energy products on Monday, reformulated gasoline for September delivery declined a penny, or 0.3%, to $2.12 a gallon.

On Monday, September natural gas declined 16 cents to $4.31 per million British thermal units, its lowest close since early June.

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 higher by Rs 24 (0.64%) at Rs 3,756/barrel. Natural gas for August delivery closed at Rs 199, lower by Rs 8.5 (4.1%).