Crude ends marginally higher

Prices pare part of its intra day gains

Crude oil prices ended marginally higher on Wednesday, 08 September 2010 at Nymex. Prices pared some of its gains following the release of Fed's Beige Book. Prices also ended higher as the dollar weakened.



On Wednesday, crude oil futures for light sweet crude for October delivery closed at $74.59/barrel (higher by $0.50 or 1.1%). Earlier during the day, prices crossed $75 mark. Last week, crude ended lower by 0.8%.

For the month of August, crude ended lower by 8.9%. Before this, in July, crude ended higher by 4.5%. 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 0.2%.

Oil witnessed its first monthly decline in August since May. The month started well, with prices surpassing $82 a barrel, but soon got derailed as key reports showed the bad times were far from over.

In the currency market on Wednesday, the dollar index, which measures the strength of the dollar against a basket of six other currencies, slipped by 0.4%.

The latest Beige Book from the Fed was released today. It indicated that five western districts reported modest growth, while a limited number of eastern districts saw improvement and some Midwestern districts saw mixed data. The Beige Book also indicated that consumer caution has governed discretionary purchases, but that consumer spending has increased, on balance.

In its monthly outlook, the EIA said it expects global oil consumption to rise by 1.4 million barrels a day in 2011, down from last month's forecast of 1.5 million barrels. It kept its consumption growth forecast for this year unchanged at 1.6 million barrels a day. But a drawdown in global oil inventories should support prices, despite weaker appetite and the recent drop in world oil prices.

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 higher by Rs 25 (0.7%) at Rs 3,509/barrel. Natural gas for September delivery closed at Rs 179.9, lower by Rs 1.4 (0.8%).