Crude heads up

Prices rise due to concerns over supply disruptions

Crude prices ended higher on Monday, 10 January 2011 at Nymex. Prices rose due to a weak dollar and concerns over supply disruptions due to a leakage discovered at Trans-Alaska pipeline.



On Monday, crude oil futures for light sweet crude for February delivery closed higher by $1.22 (1.3%) at $89.25/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 Monday, the dollar index, which weighs the strength of the dollar against a basket of six other currencies fell by 0.2%. Reports that Portugal is preparing to take an European Union and International Monetary Fund bailout had earlier weakened the euro.

The Trans-Alaska Pipeline remained shut Monday, 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.

Among other energy products, gasoline for February added 4 cents, or 1.7%, to $2.45 a gallon. Gasoline lost 0.8% last week. February heating oil added 7 cents, or 2.8%, to $2.56 a gallon. Heating oil lost 2% last week.

Natural gas futures, however, declined. The fuel for February delivery retreated 2 cents, or 0.5%, to $4.40 per million British thermal units on expectations of warmer weather in the U.S. next week. The fuel ended flat last week.

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 29 (0.7%) at Rs 4,049/barrel. Natural gas for January delivery closed at Rs 199.5, lower by Rs 2.1 (1.04%).