Crude prices take a big leap

Crude gains more than 4% on a single session

Crude prices ended substantially higher on Tuesday, 03 January 2012 at Nymex. Prices rose in tandem with US stocks. A weak dollar and better than expected economic data at Wall Street pulled up prices. Geopolitical concerns surrounding Iran and potential for conflict in the Strait of Hormuz also kept oil prices high throughout the session.

Light and sweet crude for February delivery rose $4.13 (4.2%) to $102.96 a barrel on the New York Mercantile Exchange on Tuesday. For the year 2011, crude futures gained 8.2%.



In the currency market on Tuesday, the Dollar Index, which weighs the strength of dollar against basket of six other currencies fell by almost 0.7%. For the year 2011, the dollar index had gained 1.6%.

US stocks kicked off the New Year 2012 with a bang on Tuesday, 03 January 2012. Stocks are holding their gains in the wake of a couple of doses of economic data. Both proved better than expected. Wall Street was closed on Monday, 02 January 2012 in lieu of New Years Holiday.

Among economic data expected for the day, the Commerce Department reported today that outlays for U.S. construction projects rose 1.2% in November, 2011. The gain in construction spending in November was above expectations of a 0.5% gain. However, October construction spending was revised down to show a 0.2% decline from the previous estimate of a 0.8% gain. In November, spending on private construction rose 1.0% and residential construction rose 2.0%. Spending on public projects rose 1.7%.

Separate report showed that manufacturing activity accelerated in December, highlighting the U.S. economy's momentum heading into the New Year. The Institute for Supply Management's manufacturing index for December climbed to 53.9% from 52.7% in November, which is a six-month high. Market had anticipated a 53.0% reading. Any reading above 50% indicates expansion. Of the 18 industries surveyed, nine reported growth while nine reported contraction.

Among other energy products on Tuesday, the February gasoline contract advanced 9 cents, or 3.4%, to $2.75 a gallon, and heating-oil futures for the same month added 12 cents, or 4.3%, to $3.04 a gallon.

February natural-gas futures turned higher, inching less than a cent up to end the day at $2.99 per million British thermal units. That snapped a five-day losing streak for natural gas.

At the MCX, crude oil for January delivery closed higher by Rs 117 (2.2%) at Rs 5,442/barrel. Natural gas for January delivery closed at Rs 160.2, lower by Rs 1.4 (0.9%)