Crude prices ended with losses on Monday, 03 November, 2008. The firm dollar and the current global crisis were the main reasons behind the subdued crude prices. Today's weak economic data also added to this.
On Monday, crude-oil futures for light sweet crude for December delivery closed at $63.91/barrel (higher by $3.9 or 5.8%) on the New York Mercantile Exchange. Prices reached a high of $147 on 11 July but have dropped almost 57% since then. Last week, prices rose by 5.7%. On a yearly basis, crude price is lower by 33%. For this year in 2008, crude prices have dropped 35.2%.
For the month of October, 2008, crude prices ended lower by 32.6%, the biggest monthly drop since 1983.
In the currency market on Monday, the U.S. dollar posted broad-based gains against other major currencies rising both against the British pound and the euro ahead of key interest rate decisions in Europe due later this week. The dollar index, a measure of the greenback against a trade-weighted basket of six currencies, rose 1.3% to 86.35.
Among najor economic report for the day, the Institute of Supply Management (ISM) Index survey reported today, Monday, 03 November, 2008 that national manufacturing activity at US in October fell to the lowest level since 1982.
Specifically, the ISM Manufacturing Index declined 4.6 to 38.9 in October, which was worse than the expected reading of 41.0. The number indicates contraction in manufacturing and the overall economy. Readings below 50% in the ISM diffusion index indicate that more firms are contracting than growing. The ISM tracks the breadth of growth across firms, asking purchasing managers if business is better or worse this month than last month.
OPEC officials decided last month at its meeting at Vienna that OPEC will pare production by 1.5 million barrels a day w.e.f 1 November, 2008. The official production quota is currently 28.8 million barrels, and it cut by 1.5 million in November.
Last week, the Centre for Global Energy Studies said that global oil demand may fall for the first time in 15 years in 2008 and stagnate next year.
For the third quarter of the year crude prices ended lower by 28%. This was the biggest quarterly drop since 1991. Before that, crude prices had gained 38% in the second quarter of this year. It was the biggest quarterly increase in nine years. For the month of September, prices registered drop of 13%.
Against this background, December reformulated gasoline futures fell 13.3 cents to close at $1.3625 a gallon and December heating oil futures shed 10.1 cents to end at $1.9828 a gallon.
December natural gas saw a modest gain by the close. It finished at $6.838 per million British thermal units, up 5.5 cents.
At the MCX, crude oil for November delivery closed at Rs 3,167/barrel, lower by Rs 165 (4.95%) against previous day's close. Natural gas for November delivery closed at Rs 326/mmbtu, higher by Rs 5.2/mmbtu (1.6%).
0 comments:
Post a Comment