Crude prices continue to end higher

Prices rise in tandem with US equities as Dow witnesses huge gains

Crude prices ended higher on Tuesday, 23 August 2011 at Nymex. Prices rose in tandem with US equities on Tuesday. Stocks rebounded on Wall Street for second straight day and Dow ended with more than 300 points gain. Prices also rose due to the weak dollar and as tension once again mounted at Libya as Libyan rebels gained control of most of Tripoli and as world leaders called for Gadhafi to give up the fight.



On Tuesday, crude oil futures for light sweet crude for September delivery closed higher by $1.02 (1.2%) at $85.44/barrel. Prices fluctuated between small gains and losses earlier during the day. Last week, crude lost 3.7%.

In the currency market on Tuesday, the dollar index, which measures the strength of the dollar against a basket of six other currencies, dropped by 0.17%.

US stocks galloped across the board on Tuesday ignoring the housing sector report. Dow added more than 300 points to its kitty. A preliminary reading of China's August purchasing managers index rose to 49.8 from 49.3 in July. The data showed that activity in China contracted, but it was much better than what market expected. The German manufacturing PMI for August was unchanged from July at 52 and beat the 50.8 consensus forecast. The composite PMI index for the euro zone was 51.1, unchanged from a 22-month low in July, and better than the 50.3 consensus forecast.

New home sales in US fell 0.7% in July to a 298,000-unit pace. Most of the drop was in sales of homes priced between $400,000 and $750,000. Sales increased for homes priced below $150,000 and above $750,000.

Among other energy products on Tuesday, September gasoline advanced 4 cents, or 1.5%, to $2.88 a gallon. That was gasoline's highest close in nearly three weeks. Heating oil for the same month added 3 cents, or 1.1%, to $2.94 per gallon.

The September contract rose 10 cents, or 2.7%, to $3.99 per million British thermal units.

The Energy Department is expected to come out with the weekly inventory report tomorrow. Market expects crude inventories to have risen 2 million barrels last week. Gasoline inventories is expected to have dropped around 1.3 million barrels while distillates are expected to have risen 1.4 million barrels for last week.

At the MCX, crude oil for August delivery closed higher by Rs 76 (1.98%) at Rs 3,911/barrel. Natural gas for August delivery closed at Rs 181.8, higher by Rs 2.6 (1.45%).