Crude shoots up

Prices rise despite stocks slipping considerably at Wall Street

Crude prices ended substantially higher on Tuesday, 25 October at Nymex. Prices rose despite US stocks slipping considerably on Tuesday. Prices shot up following better than expected data in the manufacturing zone out of China earlier this week.



Light and sweet crude for November delivery rose $1.9 (2.1%) to $93.17 a barrel on the New York Mercantile Exchange on Tuesday. Last week, crude gained 0.7%. For the month of September, oil futures lost 11%, and for the quarter, crude incurred losses of 17%. It was the worst quarterly performance for crude in almost two years.

In the currency market on Tuesday, earlier today the Dollar Index slipped below the 76 line for the first time in more than a month, but managed to rebound. It was last quoted with a 0.2% gain at about 76.3. Headlines that a meeting between EU finance ministers will be cancelled brought buyers back to the dollar.

Latest data in US showed that consumers became more pessimistic about both current and future conditions in October, as consumer confidence dropped to the lowest level since March 2009. The nonprofit organization said its consumer-confidence index declined to 39.8 in October from a September level of 46.4, which was upwardly revised from a prior estimate of 45.4. Market expected a reading of 46 for October; when the economy is growing at a good clip, confidence readings are at 90 and above.

A preliminary monthly survey of Chinese manufacturing conditions, released by HSBC, showed a rise to a five-month high. HSBC's “flash” China Manufacturing Purchasing Managers' Index climbed to 51.1, up from 49.9 in September. Among the survey's key subcomponents, manufacturing output rose to a six-month high of 51.7, from 50.3 in September, and above the 50 level dividing expansion from contraction. Commodities rallied following this report on optimism about China's appetite for raw materials in coming months. Markets were also cautiously optimistic on thoughts that European leaders will agree this week to a comprehensive plan to address the region's debt crisis.

Among other energy products on Tuesday, Gasoline for November delivery added less than 1 cent to finish at $2.70 a gallon. November heating oil also declined less than a penny to end at $3.05 a gallon. Both had started the day in the red.

November natural gas rose 5 cents, or 1.5%, to settle at $3.66 per million British thermal units.

At the MCX, crude oil for November delivery closed higher by Rs 101 (2.2%) at Rs 4,647/barrel. Natural gas for November delivery closed at Rs 192.1, higher by Rs 2.3 (1.2%).