Informist, Wednesday, Dec 14, 2022
By Chinmay Mungse
MUMBAI – Crude oil prices in India and abroad rose today as weakness in the dollar boosted demand for the fuel.
* A weaker greenback makes dollar-denominated commodities such as crude oil cheaper for holders of other currencies, thus boosting demand.
* Lower-than-expected US consumer price inflation in November raised hopes of a recession being avoided, which also supported crude oil prices.
* “Crude prices got a boost from a cool inflation report that supports the case that the US economy could still have a soft landing,” said Ed Moya, senior analyst at OANDA, UK.
* US CPI inflation fell to 7.1% in November against expectations of 7.3% by Dow Jones. The CPI rose 0.1% on month, lower than the estimate of 0.3% by Dow Jones.
* At 1728 IST:
–January contract on the Multi Commodity Exchange of India was up 0.7% at 6,297 rupees per barrel.
–January contract on the New York Mercantile Exchange was up 1.2% at $76.28 per bbl.
* Investors and market participants are now waiting for the outcome of the US Federal Reserve’s policy meeting and the post-meet press conference, due later today. Investors will look for cues on the pace of future rate hikes in Fed Chairman Jerome Powell’s statement.
* Market focus has also shifted to the weekly oil inventories report from the US Energy Information Administration, due later today, after data from the American Petroleum Institute showed an unexpected rise in US crude oil inventories. According to data from the American Petroleum Institute, crude oil stocks in the US rose 7.8 mln bbl in the week to Dec 9.
* Outlook for the evening session:
–MCX contract is seen at 6,100-6,400 rupees per bbl
–NYMEX contract is seen at $74.30-$76.85 per bbl
End
US$1 = 82.46 rupees
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Ashish Shirke
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