Tuesday, Jan 21
By Roshni Devi
MUMBAI – Forecast of a slowdown in global economic growth dragged down crude oil contracts on the Multi Commodity Exchange of India and the New York Mercantile Exchange by over 1% today, analysts said.
At 1700 IST, the February crude oil contract on MCX was down 1.3% at 4,127 rupees a bbl and the February delivery contract on NYMEX was down 1.2% at $57.85 a bbl.
The International Monetary Fund shaved its outlook for global growth in 2020 to 3.3% from 3.4% projected in October, mostly due to a sharper-than-expected slowdown in India and other emerging markets. It also cut the forecast for 2021 to 3.4% from 3.6%.
“The underlying causes of trade tensions and the fundamental issues of reform of the trade system are still with us,” the IMF said.
Easing supply concern after worry over disruption to production in Libya and Iraq were also a negative for crude oil prices.
“OPEC (and its allies) can quickly meet production losses from Libya and potentially Iraq. OPEC+ is much more poorly equipped to deal with a loss on the demand-side of the equation, should Asian requirements take a sudden negative hit,” a report by OANDA said.
Prices had risen on Monday after Iraq temporarily stopped work in an oilfield on Sunday due to unrest in the country, and Libya blocked exports from some ports.
For the rest of the day, the MCX contract is seen at 4,070-4,230 rupees per bbl, and the contract on NYMEX is seen at $57.00-$59.30 a bbl, said Angel Commodities. End
US$1 = 71.20 rupees
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Subham Mitra
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