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India Crude: Up on improved risk appetite, worry over tight supply

Informist, Tuesday, Sep 13, 2022


By Sayantan Sarkar


MUMBAI – Crude oil prices in India and abroad rose for the fourth straight session today as improved risk appetite among investors and concerns over tight supplies lifted outlook for the commodity. 


* “An improvement in risk appetite in the markets combined with a softer dollar may have contributed to the crude recovery. Especially when combined with another stall in negotiations between the US and Iran over the nuclear deal,” Craig Erlam, senior market analyst at UK, OANDA, said in a note. 


* As winter nears, oil supply is expected to become tighter due to the European Union’s embargo on Russian energy imports, which will be phased out by the end of the year. Additionally, Russia has also halted supply of natural gas by the Nord Stream 1 pipeline to Europe as it wants the latter to ease sanctions.


* Ahead of the winter, Europe has been struggling to replace Russian oil and gas imports, which it heavily relies on. 


* At 1717 IST:
 –September contract on the Multi Commodity Exchange of India was up 1.2% at 7,065 rupees per barrel.

 –October contract on the New York Mercantile Exchange was up 1.6% at $89.20 per bbl. 


* Meanwhile, France, the UK and Germany reportedly expressed serious doubts about Iran’s willingness to revive the 2015 nuclear deal, which could see the US ease sanctions on Tehran’s oil exports. 


* “We doubt that the trends on the (oil) market can really have already turned upwards again in any lasting fashion,” Commerzbank AG said in a report, adding that if the International Energy Agency reports an oversupply in the market in the coming months in its report on Wednesday, prices could fall once again. 


* “In this case the market would probably test whether OPEC+ is really willing to defend higher oil prices by cutting production,” the German bank said.


* The Organization of the Petroleum Exporting Countries today said that production by the cartel rose by 618,000 bbl per day in August, largely in line with the target for the month. 


* Outlook for the evening session by HDFC Securities:
 –MCX contract is seen at 6,890-7,130 rupees per bbl
 –NYMEX contract is seen at $87-$91 per bbl




US$1 = 79.14 rupees

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


Edited by Arshad Hussain


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Source: Cogencis

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