Crude adds gains

EIA raises its crude price forecast for the year

Crude prices ended higher on Tuesday, 11 January 2011 at Nymex. Prices rose due to a steady dollar and concerns over supply disruptions due to a leakage discovered at Trans-Alaska pipeline. Energy agency's forecast of crude prices for the full year also boosted prices.



On Tuesday, crude oil futures for light sweet crude for February delivery closed higher by $1.86 (2.1%) at $91.11/barrel. Last week, crude lost 3.7%.

Crude ended December higher by 8.6%. Crude ended the fourth quarter of FY 2010 higher by 13%. For the third quarter, crude ended higher by 5.7%. Crude had ended second quarter of CY 2010 lower by 9.3%. For the first quarter, crude rose by 5.5%. For the year of 2010, crude closed higher by 15%.

In the currency market on Tuesday, the dollar index, which weighs the strength of the dollar against a basket of six other currencies stayed steady. Portugal faces a key test on Wednesday when it will hold a government bond auction.

The Trans-Alaska Pipeline remained shut on Tuesday also, reducing output by 95%, after a leak was discovered at a pumping station on last Saturday. The pipeline carries about 15% of U.S. domestic production and has transported more than 15 billion barrels of crude oil.

Energy Information Administration raised its forecast for oil prices this year. The agency said late Tuesday that it expects crude-oil trading in New York to average $92 a barrel in the first quarter of the year and $93 for all of 2011. The EIA had expected $89 a barrel in its December outlook. The agency sees oil averaging $98 a barrel in 2012.

Among other energy products, gasoline for February delivery ended up 2 cents, or 1%, to $2.48 a gallon. February heating oil added 5 cents, or 2.1%, to $2.61 a gallon.

Natural gas for February delivery added 8 cents, or 1.9%, to $4.48 per million British thermal units.

Before FY 2010, crude ended FY 2009 higher by 78%, the highest yearly gain since 1999. Crude prices had ended FY 2008 lower by 54%, the largest yearly loss since trading began at Nymex.

At the MCX, crude oil for January closed higher by Rs 63 (1.5%) at Rs 4,112/barrel. Natural gas for January delivery closed at Rs 202.4, higher by Rs 2.9 (1.4%).