MCX Crude oil futures dropped by nearly one percent today, easing on weakness in global prices and a continued bout of strength in the In...
MCX Crude oil futures dropped by nearly one percent today, easing on weakness in global prices and a continued bout of strength in the Indian Rupee. The global prices continued to ease last week The commodity lingered around its four month low after the US Energy Information Administration (EIA) reduced its forecast for world oil demand growth in this month`s Short-term Energy Outlook, while slightly lowering its outlook for supply from non-OPEC producers, in a month where U.S. output exceeded supply for the first in nearly two decades.
The prices extended a drop in Asia today, trading at $93.47, down 37 cents per barrel on the day. MCX Crude oil futures for November are trading at Rs 5849, down Rs 54 per barrel on the day or 0.91%. The open interest surged nearly 6% today. Rupee reversed course following these comments and was helped by a soft undertone in the US dollar. The greenback eased from its strongest levels in two months following dovish comments from Yellen and currently trades at 1.3500 mark against the Euro. Rupee is quoting at 62.47 per dollar mark today, adding around 28 paise on the day.
The EIA estimates world consumption will be 90.25 million bpd this year, essentially unchanged from the 90.26 million bpd forecast last month. The EIA also slightly revised its forecast for 2014 demand to 91.39 million bpd from 91.43 million bpd. The agency also adjusted its prediction for prices of Brent and West Texas Intermediate crude this year, forecasting lower prices given the increase oil output from countries outside of OPEC. EIA said U.S. crude oil production increased to an average of 7.7 million barrels per day in October, the highest production for any October in 25 years, while oil imports were 7.6 million bpd.
Crude has been under stress off late and rising US crude oil stocks have been one of the primary reasons for the persistent downward movement. The International Energy Agency recently stated in the middle of November 2013 that the US would pass Russia and Saudi Arabia as the world`s top oil producer by 2015, coupled with being close to energy self-sufficient in the next two decades, as well as gains from shale formation output, too. MCX Crude oil futures for November have been under stress after the counter Rs 6000 per barrel levels and has failed to see much of bottom fishing thereafter.
Source : Capital Market
