Crude slips again

Gasoline remains the only crude product to register gains

Crude prices ended substantially lower on Monday, 07 February 2011 at Nymex. Prices dropped following a steady dollar and as conditions in Egypt eased a bit since last weekend.


On Monday, crude oil futures for light sweet crude for March delivery closed lower by $1.55 (1.7%) at $87.48/barrel. Last week, crude lost 0.4%. Crude prices gained 0.9% in January. Prices have dropped 6.1% till date this year.

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

Over the weekend, Egypt's regime met for the first time with representatives of the banned Muslim Brotherhood. President Hosni Mubarak has hung onto power despite the protests that have called for his resignation.

Roughly ten days back, tensions in Egypt fueled concerns among traders that the same might spill over to neighboring countries thus hampering production in oil producing Middle East and African countries. Egypt is not a major Mideast oil producer, as its oil output has steadily declined since the mid-1990s. But the country is a key oil-transit route with the important Suez-Mediterranean, or Sumed, pipeline and the Suez Canal.

In the currency market on Monday, the dollar index, which weighs the strength of the dollar against a basket of six other currencies, finished flat after it had staged gains in the previous three sessions. It had been on pace for another gain, but fell in afternoon trade.

Among other energy products on Monday, March reformulated gasoline bucked the trend to add 2 cents, or 0.6%, to $2.45 a gallon. Gasoline got some support from refinery shutdowns over the weekend. Heating oil for March delivery lost a penny, or 0.4%, to end at $2.71 a gallon.

Natural gas for March delivery retreated 21 cents, or 4.8%, to $4.10 per million British thermal units as milder weather is in the forecast.

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 93 (2.3%) at Rs 3,995/barrel. Natural gas for February delivery closed at Rs 188.7, lower by Rs 8.9 (4.5%).