Crude climbs up paring earlier weakness

Prices rise following upbeat retail sales data

Crude prices pared earlier weakness and ended higher on Tuesday, 13 March 2012 at Nymex. Prices were trading a bit lower earlier following strong dollar. But an upbeat retails ales data and latest statements from the Fed pushed prices higher.

Light and sweet crude for April delivery rose $0.37 (0.4%) to $106.71 a barrel on the New York Mercantile Exchange on Tuesday. Prices advanced 0.7% last week. Prices gained 8.7% during February 2012.

Data today featured February retail sales, which increased by 1.1%. Sales less autos increased by 0.9%. Both were better than what had been widely predicted. Business inventories for January hardly generated any buzz among market participants. Inventories reportedly increased by 0.7%, which is slightly greater than the 0.6% increase that had been broadly expected.



In the currency market on Tuesday, the Dollar Index, which weighs the strength of dollar against basket of six other currencies rose by almost 0.4%.

In the latest policy statement from the FOMC, the Fed opted to keep its fed funds target rate at 0.00% to 0.25% and maintained its outlook that low rates of resource utilization and subdued inflation are likely to warrant exceptionally low levels for the fed funds rate at least through late 2014. The Fed said it expects "moderate economic growth over the coming quarters and consequently anticipates that the unemployment rate will decline gradually," with the rate falling already.

Among other traded energy products on Tuesday, April gasoline advanced 3 cents, or 1%, to settle at $3.35 a gallon. April heating oil rose 3 cents, or 0.9%, to $3.27 a gallon.

April natural-gas futures gained 3 cents, or 1.3%, to end at $2.30 per million British thermal units.

At the MCX, crude oil for March delivery closed higher by Rs 9 (0.2%) at Rs 5,341/barrel. Natural gas for March delivery closed lower by Rs 1.1 (0.97%) at Rs 112.3.