Crude ends three day losing streak

Middle East tensions and somber dollar prop up prices

Crude prices ended higher on Tuesday, 22 November at Nymex. Prices rose for the first time in four days following a somber dollar and tension in the Middle East which gave rise to supply concerns. Weaker than expected economic data and recurring euro zone woes put a check to the price rise.

Light and sweet crude for January delivery rose $1.09 (1.1%) to $98.01 a barrel on the New York Mercantile Exchange on Tuesday. The contract rose to a high of $98.7 during intra day trading. Crude prices briefly pared gains earlier on Tuesday, after a disappointing estimate of U.S. third-quarter economic growth. Last week, crude lost 1.6%. For the month of October, oil futures gained 18%. During the third quarter ending in September, crude incurred losses of 17%. It was the worst quarterly performance for crude in almost two years.



Late Monday, Egypt's civilian cabinet submitted its resignation to the military, following three days of clashes.

According to the latest minutes of FOMC, there isn't enough support as yet for the Federal Reserve to adopt a formal inflation target even as the central bank is moving toward providing more guidance on where its interest rates will be in the future.

The Commerce Department in US reported today that the U.S. economy grew at a slower pace than originally estimated in the third quarter, mainly because companies reduced inventories and did not invest as much. The Commerce Department cut its estimate of gross domestic product to 2.0% from a first reading of 2.5%. The government' second revision of GDP includes data not fully available earlier, such inventory levels and trade data. As a result, it paints a more accurate picture of U.S. growth. Market had expected the government to trim its estimate to 2.3%.

In the currency market on Tuesday, the Dollar Index, which weighs the strength of dollar against basket of six other currencies ended marginally lower by 0.01%.

Among other energy products on Tuesday, December gasoline ended up 7 cents, or 2.9%, at $2.56 a gallon. December heating oil rose 4 cents, or 1.4%, to $3.035 a gallon.

December natural gas closed at $3.42 per million British thermal units, up 2 cents, or 0.5%.

At the MCX, crude oil for November delivery closed higher by Rs 104 (2.1%) at Rs 5,142/barrel. Natural gas for November delivery closed at Rs 178.2, lower by Rs 1.1 (0.6%).