Crude glides up

Oil prices end higher in sync with US stocks

Following strong gains at Wall Street today, crude prices ended higher on Monday, 23 March, 2009. The rebounding dollar was mainly the reason for this. The Treasury Department today detailed their plan to remove toxic assets from banks' balance sheets. This boosted the confidence of the investors.

On Monday, crude-oil futures for light sweet crude for May delivery closed at $53.8/barrel (higher by $1.73 or 3.3%) on the New York Mercantile Exchange. Last week, crude ended higher by 10.4%. For the month of February, crude prices had ended higher by 1.5%.

Oil prices had reached a high of $147 on 11 July, 2008 but have dropped almost 63% since then. Year to date, in 2009, crude prices are higher by 21.8%. On a yearly basis, crude prices are lower by 49%.

The Treasury Department unveiled their plan today about buying back most of the bank's toxic assets thereby cleaning up their balance sheet to the extent possible. Treasure Secretary Tim Geithner detailed today that the Treasury plans to create a series of public-private investments funds to buy $500 billion to $1000 billion in legacy loans and securities. To encourage participation from the private sector, the government is taking on much of the risk and offering subsidies.

US stocks rallied today on the back of this news and the Dow ended more than 500 points higher for the day.

Also at the Nymex on Monday, April reformulated gasoline rose 2.1% to $1.4881 a gallon and April heating oil gained added 6.3% to $1.4707 a gallon.

April natural-gas futures rose 1.6% to $4.294 per million British thermal units.

Crude prices had ended FY 2008 lower by 54%, the largest yearly loss since trading began at Nymex.

At the MCX, crude oil for March delivery closed at Rs 2,694/barrel, higher by Rs 65 (2.5%) against previous day's close. Natural gas for April delivery closed at Rs 221.7/mmbtu, higher by Rs 3.1/mmbtu (1.4%).