Crude shoots up

Natural gas also witnesses sharp rise

Oil prices shot up on Thursday, 17 March 2011 at Nymex. Prices rose in tandem with US stocks and riding on the back of economic data and weak dollar.

On Thursday, crude oil futures for light sweet crude for April delivery closed higher by $2.92 (3%) at $100.89/barrel. Last week, prices closed lower by 3.1%.



Crude prices gained 5.2% in February 2011 after gaining 0.9% in January.

U.S. stocks rose sharply on Thursday, 17 March 2011 as a round of economic data and an upbeat forecast from shipper FedEx Corp. helped the market rebound after three straight declining sessions. Ongoing headline risk related to social and political unrest in the Middle East and North Africa, and more recently from the fears that have stemmed from the massive earthquake and subsequent failures at nuclear facilities in Japan kept the indices lingering in the red since past few sessions.

In the currency market on Thursday, the dollar index, which measures the strength of the dollar against a basket of six other currencies, weakened. The dollar fell mainly against the yen.

Traders got a big dose of economic data today. The latest initial weekly jobless claims tally totaled 385,000, which is on par with what had been broadly expected. Overall consumer prices for February increased 0.5%. Core prices increased by 0.2%. Both were about what had been widely anticipated.

The Philadelphia Fed Index for March surged to a 25-year high of 43.4. On the other hand, Leading Indicators for February increased by a slightly smaller-than-expected 0.8%. Only industrial production for February really disappointed with its 0.1% slip in the face of consensus forecasts for an increase of about 0.6%.

In the latest weekly inventory report, EIA reported yesterday that crude oil supplies rose 1.7 million barrels for the week ended 11 March against an expected rise by 2.1 million barrels. The report also showed that gasoline supplies declined 4.2 million barrels, against expectations around a decline of 1.5 million barrels. Stocks of distillates, which include heating oil and diesel, decreased 2.6 million. Market had expected distillate stocks to be down 1.4 million barrels.

Among other energy products on Thursday, gsoline for April delivery rose 8 cents, or 2.9%, to $2.93 per gallon. April heating oil advanced 6 cents, or 1.9%, to $3.05 a gallon.

April natural gas added 17 cents, or 4.3%, to $4.11 per million British thermal units. Natural-gas futures rallied on the heels of the Energy Department's weekly report on gas in storages last week. The Energy Information Administration reported on Thursday a decline of 56 billion cubic feet for the week ended 11 March.

At the MCX, crude oil for March closed higher by Rs 142 (3.2%) at Rs 4,586/barrel. Natural gas for March delivery closed higher by Rs 7.4 (4.1%) at Rs 186.7.