Informist, Tuesday, Oct 19, 2021
By Sayantan Sarkar
MUMBAI – Crude oil prices rose on the domestic bourses today, tracking the rise in the overseas market because of tight supplies.
* Tight supply of natural gas and coal has prompted power generators to switch to crude oil. This is expected to increase demand for the fuel by an additional 500,000 barrels per day in the coming months, according to International Energy Agency’s estimates.
* But the tightness in supply also extends to crude oil, with the Organization of the Petroleum Exporting Countries pumping oil way below their capacities
* “This market tightness is expected to extend into most of 2022, and crude oil demand will only catch up with crude supply by the fourth quarter of next year,” Louise Dickson, Rystad Energy’s oil market analyst, said in a daily commentary.
* At 2011 IST
–The November crude oil contract on the Multi Commodity Exchange of India was up 0.8% at 6,226 rupees per bbl.
–The December contract on New York Mercantile Exchange was up 0.1% at $81.77 per bbl.
* Meanwhile, falling temperatures in China and in the Northern Hemisphere have also ignited concerns that crude oil production will be unable to bridge the gap between supply and surging consumption patterns.
* Outlook for the evening session by Tapan Patel, senior analyst at HDFC Securities:
–The MCX contract is seen at 6,130-6,270 rupees per bbl
–The NYMEX contract is seen at $81-$85 per bbl
End
US$1 = 75.34 rupees
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Ashish Shirke
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