Crude plunges

Demand concerns and strong dollar took crude prices substantially lower on Monday, 30 March, 2009. Many traders had anticipated that crude's recent rally was overdone and hence ended lower for the day. Prices closed below $50 after almost two weeks of rally.

On Monday, crude-oil futures for light sweet crude for May delivery closed at $48.41/barrel (lower by $3.97 or 7.6%) on the New York Mercantile Exchange. Last week, crude ended higher by 0.6%. 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 10%. On a yearly basis, crude prices are lower by 51%.

In the currency market on Monday, the dollar moved higher against most major rivals as investors panicked amid fears in the US auto industry. The dollar index gained 0.8% today.

The U.S government's auto task force determined that neither General Motors nor privately held Chrysler had submitted viable restructuring plans and also indicated bankruptcy may be required for the flagging auto companies. This issue kept selling pressure intense in the Wall Street today and stocks lingered in the red for the entire day.

Also at the Nymex on Monday, April reformulated gasoline fell 10.8 cents, or 7.3%, to $1.3799 a gallon and April heating oil dropped 9.02 cents, or 6.3%, to $1.3426 a gallon.

Natural gas for April delivery gave up 3.82 cents, or 8.8%, to $3.947 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 2,498/barrel, lower by Rs 158 (5.9%) against previous day's close. Natural gas for April delivery closed at Rs 194.3/mmbtu, higher by Rs 0.5/mmbtu (0.25%).