Informist, Wednesday, Jul 6, 2022
By Chinmay Mungse
MUMBAI – Crude oil prices in India and abroad rose today as disappointing production from the Organization of the Petroleum Exporting Countries and its allies triggered the fears of supply crunch.
* The OPEC pumped 28.52 mln barrels per day in June, down 100,000 bpd from May. OPEC had planned to boost June output by about 275,000 bpd.
* The sanctions imposed by the West on Russian crude oil also widened the supply-demand gap which drove the prices higher.
* “The oil market remains tight and given the expectation that Russian oil supply will decline as we move through the year, the market is set to remain tight,” said Warren Patterson, head of commodities strategy at ING Economics. “Therefore, we expect any further downside in the market to be fairly limited.”
* Saudi Arabia increased its official selling price for Arab Light oil into Asia for August to $9.30 per bbl over the benchmark. It also increased official selling prices for all other grades into Asia for the month, which supported crude oil prices.
* At 1613 IST:
–July contract on the Multi Commodity Exchange of India was up 1.9% at 7,931 rupees per bbl.
–August contract on the New York Mercantile Exchange was up 0.4% at $99.87 per bbl.
* However, mounting worries about a global economic downturn and lockdowns in China are expected to hit the demand for petroleum products, which capped the upside in crude prices.
* Outlook for the evening session by Finlit Consulting:
–MCX contract is seen at 7,900-8,100 rupees per bbl
–NYMEX contract is seen at $99.20-$102.40 per bbl
US$1 = 79.30 rupees
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Arshad Hussain
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