Crude prices ended once again higher today, Wednesday, 20 February, 2008. Prices rose today after comments from Federal Reserve Chairman's that Fed is quite ready to ease interest rates further to help US economy find a solid footing. Oil also rose after the U.S. dollar fell enhancing the appeal of commodities as an inflation hedge.
Crude-oil futures for light sweet crude for March delivery today closed at $100.74/barrel (higher by $0.73/barrel or 0.7%) on the New York Mercantile Exchange. Earlier in the session, the March contract, which expired today, hit a record all-time high of $101.32 a barrel.
The Federal Reserve confirmed today that it is willing to do more to help the economy find its footing, but warned that inflation worries might necessitate swift rate hikes once growth resumes.
Yesterday crude prices had rallied more than 5% after it was reported that Iranian oil minister said over the weekend that reducing production is very normal for OPEC in March. Iran is OPEC's second largest oil producer.
Brent crude oil for April settlement today fell $0.14 (0.1%) to $98.42 on the London-based ICE Futures Europe exchange. The London benchmark rose 54% in FY 2007, the most since 1999 when prices more than doubled.
Crude had ended FY 2007 substantially higher by $35 or 57%. It was crude's biggest yearly gain in five years.
Natural gas remains unchanged
Natural gas in New York was little changed, erasing an earlier gain, on speculation supplies are ample for the remaining cold-weather months. Gas for March delivery fell 0.9 cent to $8.968 per million British thermal units. Gas surged 3.7% and has advanced 20% so far this year.
Against this backdrop, March reformulated gasoline ended down 1 cent at $2.59 a gallon and March heating oil dropped 1 cent to end at $2.75 a gallon.
In a monthly report released last week, EIA said the world oil market is poised to ease over the next two years with production increases offsetting moderate growth in oil demand.At the MCX, crude oil for February delivery closed at Rs 3,952/barrel, higher by Rs 51 (1.3%) against previous day's close. Natural gas for February delivery closed at Rs 360.6/mmtbu, higher by Rs 3.3/mmtbu (0.9%)