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Tuesday, October 4, 2022

India Crude: MCX down; NYMEX up on short covering, tight supply

Informist, Thursday, Aug 4, 2022


By Chinmay Mungse


MUMBAI – Crude oil prices were trading lower today in the domestic market, tracking overnight fall on the New York Mercantile Exchange.


* Crude oil futures rose today on the NYMEX as investors covered their short positions after the contracts tumbled to multi-month lows on Wednesday.


* Rise in US inventory and the decision of the Organization of the Petroleum Exporting Countries and its allies to increase output by 100,000 barrels per day pushed crude oil prices to a near six-month low on NYMEX on Wednesday.


* US crude oil inventories rose by 4.5 mln bbl in the previous week, against expectations of a fall of 600,000 bbl.


* “Investors covered their short positions as crude prices hit multi-month lows on Wednesday. A tight global supply situation also supported crude prices today,” said Veeresh Hiremath, director at Finlit Consulting.


* The Caspian Pipeline Consortium, which connects Kazakh oil fields with the Russian Black Sea port of Novorossiisk, reported a significant drop in supplies, which supported prices. The Caspian Pipeline Consortium handles about 1% of the global oil supply.


* A softer US dollar against a basket of major currencies also boosted demand for crude oil. A fall in the greenback makes the dollar-denominated commodity cheaper for international investors.


* At 1653 IST:
 –August contract on the Multi Commodity Exchange of India was down 0.3% at 7,237 rupees per bbl.

 –September contract on the NYMEX was up 0.6% at $91.22 per bbl.


* Outlook for the evening session:
 –MCX contract is seen at 7,200-7,400 rupees per bbl
 –NYMEX contract is seen at $91.00-$92.00 per bbl



US$1 = 79.46 rupees

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT


Edited by Ashish Shirke


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Source: Cogencis

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