Informist, Friday, Nov 12, 2021
By Chinmay Mungse
MUMBAI – Crude oil prices in India and abroad fell today after the Organization of the Petroleum Exporting Countries revised downward its forecast for global demand growth in 2021.
* OPEC trimmed its estimate for global oil demand growth by 160,000 barrels per day this year, and now sees demand rising by 5.7 mln bpd. OPEC said that higher energy prices were expected to weigh on the recovery in global demand during the quarter ending December.
* “If high prices prevail, demand for crude oil from several smaller economies will fall significantly,” said Tapan Patel, a senior analyst at HDFC Securities.
* The overall strength in the dollar also weighed on prices in the international markets. The dollar strengthened against major currencies after inflation in the US jumped to an over 30-year high level in October.
* At 1704 IST
–The November crude oil contract on the Multi Commodity Exchange of India was down 1.2% at 5,951 rupees per bbl
–The December contract on New York Mercantile Exchange was down 1.7% at $80.18 per bbl.
* “Despite the somewhat lower oil demand, the supply gap in the current quarter is still likely to total 1.0-1.5 million barrels per day. OPEC itself is contributing to this, as it is still producing much less oil than agreed,” said Commerzbank AG.
* “Headwind is being generated by speculations about release of strategic oil reserves in the US. The oil market will remain tight in the short term, as confirmed by the OPEC monthly report,” added the German bank.
* Outlook for the evening session by Tapan Patel:
–The MCX contract is seen at 5,890-6,080 rupees per bbl
–The NYMEX contract is seen at $78.0-$82.0 per bbl. End
End
US$1 = 74.44 rupees
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Mainak Moitra
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