Informist, Tuesday, Oct 11, 2022
By Sayantan Sarkar
MUMBAI – Crude oil prices in India and abroad slumped today as fears about a possible recession and fresh lockdowns in China dragged down demand for the commodity.
* Prospects of higher interest rates around the world have dulled the demand for crude oil in major markets. Global central banks have been raising rates sharply for the past few months to tame inflation.
* Meanwhile, China has imposed fresh curbs to contain the COVID-19 pandemic in several places, which also weighed on prices. The country, the biggest importer of oil in the world, has also ramped up tests in cities such as Shanghai and Shenzhen.
* At 1730 IST:
–October contract on the Multi Commodity Exchange of India was down 3.1% at 7,359 rupees per barrel.
–November contract on the New York Mercantile Exchange was down 1.8% at $89.47 per bbl.
* On the other hand, the US is considering releasing more oil from its strategic petroleum reserves after the Organization of the Petroleum Exporting Countries and its allies announced output cuts, according to reports. This is expected to lower the reserves in the US, as the country has been releasing crude since April to cool down domestic gasoline prices.
* The barrels of oil that have been released by the US are supposed to be replenished, though they will no longer have to reach their previous levels due to the lower import dependence of the country.
* “Replenishing the reserves will absorb supply in future,” Commerzbank AG said in a report.
* Outlook for the evening session by Angel One Commodities and Geojit Financial Services:
–MCX contract is seen at 7,270-7,770 rupees per bbl
–NYMEX contract is seen at $88.57-$92.79 per bbl
End
US$1 = 82.31 rupees
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Avishek Dutta
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