Crude continues to slip

Prices end lower as economic data disappoints

Crude prices ended lower on Tuesday, 15 February 2011 at Nymex. Prices slipped as economic data for the day failed to meet expectations and also as fresh violence cropped up in parts of Middle East like Bahrain and Yemen following recent events in Egypt.

On Tuesday, crude oil futures for light sweet crude for March delivery closed lower by $0.42 (0.6%) at $84.32/barrel. Last week, crude lost 3.9%. Crude prices gained 0.9% in January. Prices have dropped 9.8% till date this year.



For the year of 2010, crude closed higher by 15%.

In the currency market on Tuesday, the dollar index, which weighs the strength of the dollar against a basket of six other currencies, finished flat.

The New York Federal Reserve Bank reported on Tuesday that conditions for manufacturing in the New York region improved in February from the prior month. The bank's Empire State Manufacturing index rose to 15.4 in February from a revised 11.9 in January. This is the highest level since last June and above expectations. Market had forecast the index would rise to 14.3.

The Commerce Department in US reported on Tuesday, 15 February 2011 that sales at U.S. retail stores rose 0.3% in January to mark the seventh straight monthly gain. But the increase was the lowest since last summer. Sales excluding the volatile auto segment were also up 0.3%. Market had forecast sales to rise by 0.6% overall, and by 0.6% excluding autos.

Yesterday trade data showed that China's imports surged 51% in January. China imported 21.8 million metric tons, or 5.13 million barrels a day, of crude oil in January. That is 27% more than last year and the third highest monthly level ever.

Last week, the Organization of the Petroleum Exporting Countries and the International Energy Agency both forecast increased demand for crude oil this year. As per IEA, daily demand for oil will grow by 1.5 million barrels a day to 89.3 million barrels a day in 2011. In 2010, global oil demand rose by 2.8 million barrels a day year on year to 87.8 million barrels a day. World oil supply rose by 500,000 barrels a day in January, to 88.5 million barrels a day, on higher output from OPEC.

OPEC also saw rising worldwide demand for oil. It projected that world oil demand grew by 1.8 million barrels a day to 86.3 million barrels a day in 2010 and forecast a rise of 1.4 million barrels a day in 2011, averaging 87.7 million barrels a day.

Among other energy products on Tuesday, gasoline gave back some of its recent gains, with the March contract declining 3 cents, or 1.1%, to settle at $2.49 a gallon. March heating oil retreated 2 cents, or 0.8%, to $2.73 a gallon.

March natural gas added 5 cents, or 1.3%, to trade at $3.98 per million British thermal units.

Before FY 2010, crude ended FY 2009 higher by 78%, the highest yearly gain since 1999. Crude prices had ended FY 2008 lower by 54%, the largest yearly loss since trading began at Nymex.

At the MCX, crude oil for February closed lower by Rs 62 (1.6%) at Rs 3,831/barrel. Natural gas for February delivery closed higher by Rs 3.1 (1.7%) at Rs 181.2.