Volatile crude ends modestly higher

Crude earlier trades between small gains and losses ahead of tomorrow's weekly inventory report

Crude prices ended modestly higher on Wednesday, 04 January 2012 at Nymex. Prices remained volatile earlier in the day oscillating between small gains and losses ahead of tomorrow's weekly inventory report on crude stockpiles. The report is a day late because of New Year Holiday on last Monday. Geopolitical concerns surrounding Iran and potential for conflict in the Strait of Hormuz helped prices get ground which otherwise was getting affected due to a strong dollar.



Light and sweet crude for February delivery rose $0.26 (0.3%) to $103.22 a barrel on the New York Mercantile Exchange on Wednesday. It had earlier traded between small gains and losses, with pressure from a higher dollar and some profit taking. For the year 2011, crude futures gained 8.2%.

In the currency market on Wednesday, the Dollar Index, which weighs the strength of dollar against basket of six other currencies rose by almost 0.5%. A barometer of economic and financial sentiment, the euro, continued to trade with weakness. It was down 0.9% against the greenback on Wednesday. For the year 2011, the dollar index had gained 1.6%.

Among economic data expected for the day, the Commerce Department reported a 1.8% rise in factory orders for November 2011, compared with an anticipated rise of 1.9%.

Among other energy products on Wednesday, February gasoline was up 4 cents, or 1.3%, to $2.79 a gallon. Heating oil for the same month's delivery added 5 cents, or 1.7%, to $3.09 a gallon.

February natural gas advanced 10 cents, or 3.4%, to $3.10 per million British thermal units.

At the MCX, crude oil for January delivery closed higher by Rs 20 (0.4%) at Rs 5,462/barrel. Natural gas for January delivery closed at Rs 164.4, higher by Rs 4.2 (2.6%).