Crude plunges

Crude slips drastically as dollar rises

Crude prices ended drastically lower on Tuesday, 04 January 2011 at Nymex. Prices dropped as the dollar headed up. Crude prices slipped in tandem with other commodities on Tuesday.



On Tuesday, crude oil futures for light sweet crude for January delivery closed lower by $2.17 (2.4%) at $89.38/barrel.

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 rose by 0.3%.

The Commerce Department in US reported on Tuesday, 04 January 2011 that U.S. factory orders jumped 0.7% in November to $423.9 billion, well ahead of the forecast for a 0.1% increase. Orders for October were also revised to show improvement. Orders in October fell 0.7% instead of the originally reported 0.9%. Excluding transportation, factory orders rose a sharper 2.4% in November. A steep drop in the sale of aircraft prevented factory orders from rising even higher.

The minutes from the Federal Reserve's last minutes were released an hour before settlement but did little to curtail the losses. The minutes showed the central bank saw signs the economic outlook was improving but decided it was not sufficient to make any adjustments to the bond-buying plan.

February gasoline futures declined 1 cent, or 0.6%, to $2.41 a gallon.

Natural gas futures for February were off 2 cents, or 0.4%, to $4.67 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 lower by Rs 95 (2.3%) at Rs 4,041/barrel. Natural gas for January delivery closed at Rs 210.6, higher by Rs 2.3 (1.1%).