Crude reverses course

Prices pare early weakness and rises modestly higher

Oil prices pared early weakness and ended modestly higher on Tuesday, 29 March 2011 at Nymex. Prices dropped initially following weak economic data and also as traders anticipated that Libya will soon resolve its problems relating to supply to the world. But a steady dollar coupled with crisis at Japan kept the price fall under check and made prices reverse course.



On Tuesday, crude oil futures for light sweet crude for April delivery closed higher by $0.81 (0.8%) at $104.71/barrel. Earlier prices traded as low as $102.71. Last week, prices closed higher by 4.2%.

Crude prices gained 5.2% in February 2011 after gaining 0.9% in January.

Among economic data expected for the day, The Conference Board said its consumer-confidence index dropped to 63.4 in March from a revised 72.0 in February, the biggest one-month drop in more than a year.

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 0.15%. The dollar was boosted by comments from a U.S. Federal Reserve official. Federal Reserve Bank of St. Louis President James Bullard said monetary-policy makers may begin to tighten without waiting for the resolution of global crises.

In other developments across the world, Japan struggled to contain radiation leaks at its crippled Fukushima Daiichi power plant, with plutonium found in soil near the plant.

Among other energy products on Tuesday, gasoline for April delivery, a contract that expires later this week, tracked oil higher, adding 2 cents to finish at $3.05 a gallon. April heating oil, also expiring later on the week, rose 2 cents to settle at $3.04 a gallon

Natural gas for May delivery, the upcoming front-month contract, settled 18 cents lower at $4.26 per million Btus.

At the MCX, crude oil for April closed lower by Rs 22 (0.5%) at Rs 4,697/barrel. Natural gas for April delivery closed lower by Rs 10.2 (4.9%) at Rs 194.8.