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Thursday, February 2, 2023

India Crude: Flat on MCX; rises on NYMEX as China reopens borders

Informist, Tuesday, Dec 27, 2022

 

By Sayantan Sarkar

 

MUMBAI – Crude oil prices in India were flat today due to a technical correction even as international contracts traded in the green after China announced that it is going to reopen its borders after three years, which raised prospects of more travel and demand recovery.

 

* At 1848 IST:
 –January contract was flat at 6,650 rupees per barrel on the Multi Commodity Exchange of India.

 –February contract on the New York Mercantile Exchange was up 0.6% at $80.06 per bbl.

 

* China is set to reopen its borders from Jan 8 for those with work and study visas, and people seeking to visit family. The country had recently eased domestic lockdowns, which had already supported crude oil prices as it is the biggest importer of the commodity.

 

* Furthermore, there are concerns that the winter storm in the US is likely to reduce oil production, further boosting prices. Airlines in the US have cancelled flights because of the winter storm, which has left thousands of homes without electricity.

 

* The US is the biggest consumer of crude oil and also the top producer. 

 

* Meanwhile, last week Russia said that it may cut production of crude oil by 500,000-700,000 barrels per day. This comes after the Group of Seven countries and EU imposed a price cap of $60 a bbl on Russian oil exports to hurt Moscow’s economy. 

 

* Reduced supply from Russia is also bullish for oil prices.

 

* “Today, market participants will be keeping an eye on the trade balance number from the US and that could provide cues to energy prices in the latter half of the day,” Motilal Oswal Financial Services said. 

 

* Crude oil prices are likely to remain positive during the rest of the week with China reopening its borders and concerns about supply from the US.

 

* Investors will also wait for the weekly inventory report of crude oil from the US later this week.

 

* Outlook for the evening session:
  –MCX contract is seen at 6,750-6,900 rupees per bbl
  –NYMEX contract is seen at $79.40–$82.30 per bbl

End

 

US$1 = 82.84 rupees

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

 

Edited by Ashish Shirke

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

 

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© Informist Media Pvt. Ltd. 2022. All rights reserved.

Source: Cogencis

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