Crude pares earlier weakness and ends higher

Low dollar and geo political concerns help prices move up

Crude prices pared earlier weakness and ended higher on Tuesday, 07 February 2012 at Nymex. Prices ended higher as rose as the dollar slipped and after Greece reportedly neared a deal that would pave the way to more international financial aid to the embattled euro-zone country. Geo political tensions also played a role in prices moving up.

Light and sweet crude for March delivery rose $1.5(1.6%) to $98.41 a barrel on the New York Mercantile Exchange on Tuesday. Prices rose to a high of $99.13 and fell to a low of $95.84 during intra day trading. Prices fell 1.7% last week. Prices fell 0.4% for the month of January.



In the currency market on Tuesday, the Dollar Index, which weighs the strength of dollar against basket of six other currencies fell by almost 0.44%.

Fed Chairman Bernanke delivered a testimony to the Senate Budget Committee today, but his comments came without surprise since they mirrored those delivered last week to the House Budget Committee. In Washington, top U.S. central banker Bernanke reiterated his call on lawmakers to cut the nation's long-term red ink, and repeated that the labor market is a long ways from returning to good health.

The European Union sovereign debt crisis was back in the financial news headlines today. Weaker-than-expected German economic data helped to pressure the Euro currency against the U.S. dollar on Tuesday. A debt- restructuring deal between the Greek government and the private sector has still not been reached, but there were a report today that a deal is very close. That also helped to rally the Euro currency and pressure the dollar index.

Geopolitical concerns of the day hovered around tensions prompted by an embargo of Iranian oil and Western powers' worries about Tehran's nuclear program, as well as rebels in Nigeria, who have threatened oil installations in the Niger river delta.

Among other traded energy products on Tuesday, gasoline for March delivery ended less than a penny lower at $2.93 a gallon. March heating oil advanced 2 cents, or 0.6%, to $3.19 a gallon.

March natural gas lost 8 cents, or 3.1%, at $2.47 per million British thermal units.

At the MCX, crude oil for February delivery closed higher by Rs 86 (1.8%) at Rs 4,858/barrel. Natural gas for February delivery closed at Rs 122.1, lower by Rs 2.3 (1.8%).