Informist, Monday, Jan 16, 2023
By Sayantan Sarkar
MUMBAI – Crude oil futures on the Multi Commodity Exchange of India rose today due to the rupee’s weakness against the dollar, which makes imports of dollar-denominated commodities more expensive.
* On the New York Mercantile Exchange, crude oil prices were in the red today as investors assessed the demand situation in China, the largest importer of oil. As the country has recently reopened its borders, demand for oil is expected to pick up sharply.
* At 1648 IST:
–January contract on the Multi Commodity Exchange of India was up 0.4% at 6,488 rupees per barrel.
–February contract on the New York Mercantile Exchange was down 0.5% at $79.45 per bbl.
* The price of India’s crude oil basket rose to an over one-week high and was up $1.31 at $81.67 a barrel on Friday, according to data from the Petroleum Planning and Analysis Cell.
* However, there are concerns that a surge in COVID-19 infections in the country could lead to another set of lockdowns, depressing demand for oil once again.
* Additionally, the market will await monthly reports later this week by the Organization of the Petroleum Exporting Countries and the International Energy Agency. OPEC’s monthly report will be released on Tuesday, in which it will provide renewed projections for oil demand and supply for 2023.
* “While there is still plenty of optimism around Chinese demand, in the near term the oil market remains relatively well supplied. We see further upside from 2Q23, as the market tightens,” Warren Patterson, head of commodities strategy at ING Group, said in a note.
* According to Commerzbank AG, supply of oil is likely to tighten from the middle of 2023 as production in the US may not rise as sharply as anticipated, while Russian exports will nosedive due to sanctions.
* Outlook for the evening session:
–MCX contract is seen at 6,230-6,640 rupees per bbl
–NYMEX contract is seen at $76.90–$81.20 per bbl
US$1 = 81.61 rupees
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Avishek Dutta
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