Crude ends higher for first time in six sessions

Prices remain choppy and weak throughout the day Crude oil prices ended higher for first time in six sessions on Tuesday, 11 December 2012 at Nymex. Prices remained weak and choppy throughout the day but moved higher at the end. A weak dollar helped put a brake on the drop in prices during intra day trading. On Tuesday, light and sweet crude oil futures for light sweet crude for January delivery closed higher by $0.23 (0.3%) at $85.79/barrel. Prices had shed almost 4% in previous five trading sessions. The Federal Reserve's “Operation Twist” program is scheduled to end this month and the FOMC members will decide this week whether to extend a bond-buying program. Many believe the Fed will announce it will continue to purchase longer-term U.S. Treasuries, while stopping its sales of shorter-term government debt, as was the case in the Twist operations. The new plan would be ostensibly printing of greenbacks by the Fed and would be raw-commodity market bullish. Also in the U.S, attention of the market place remains on the “fiscal cliff” tax increases and spending cuts that is fast approaching. There is still no apparent movement from either side on the matter. In overnight news, the feature was the German ZEW economic expectations index rising to a much higher-than-expected reading of 6.9 in December versus November's minus 15.7. The report boosted European stocks and the Euro currency, while Spanish and Italian bond yields fell. The dollar index, which weighs the strength of the dollar against a basket of six other currencies, fell by 0.3% on Tuesday. Among economic data expected for the day, the Commerce Department in US reported on Tuesday, 11 December 2012 that U.S. trade deficit increased 4.9% in October to $42.2 billion, as imports of crude oil rose and American exports of manufactured goods fell to the lowest level in nearly a year. The report said that the imports of foreign goods into the U.S. declined by 2.1% to $222.8 billion in October, but exports fell by 3.6% to $180.5 billion to account for the wider trade gap. Market had forecast the trade deficit to increase to a seasonally adjusted $42.5 billion in October. The deficit in September was revised down to $40.3 billion from $41.5 billion. Separate data showed that October wholesale inventories increased by 0.6%, which is higher than the increase of 0.4% expected by the market. Among other energy products on Tuesday, January gasoline ended up 1 cent, or 0.5%, at $2.61 a gallon and January heating oil added 3 cents, or 1.1%, to $2.93 a gallon. January natural gas fell 5 cents, or 1.4%, to $3.41 per million British thermal units. At the MCX, crude oil for December closed lower by Rs 29 (0.61%) at Rs 4,671/barrel. Natural gas for December delivery closed higher by Rs 0.1 (0.05%) at Rs 187.5.