Informist, Thursday, Dec 15, 2022
By Chinmay Mungse
MUMBAI – Crude oil prices in India and abroad pared earlier losses and traded flat today. A stronger dollar and resumption of a section of the major Keystone pipeline limited the upside.
* A higher-than-expected rise in crude oil stockpiles in the US also weighed on contracts. Crude oil inventory in the US rose by 10.2 mln barrels to 424.1 mln bbl in the week ended Friday, data from the country’s Energy Information Administration showed. Analysts polled by Dow Jones had estimated the inventory to fall by 3.1 mln bbl during the period.
* Analysts expect crude oil prices to slip further owing to the rise in inventories. “Crude oil prices are expected to fall due to a significant rise in inventories, even though the demand projections look robust,” Sriram Iyer, senior analyst at Reliance Securities, said.
* Hawkish comments from US Federal Reserve Chair Jerome Powell also weighed on crude oil prices. In the post-policy meeting press conference, Powell suggested that further rate hikes would be necessary despite the federal funds range moving to its highest level since early 2008.
* At 1748 IST:
–January contract on the Multi Commodity Exchange of India was flat at 6,397 rupees per barrel.
–January contract on the New York Mercantile Exchange was flat at $77.32 per bbl.
* However, expectations of a rise in demand limited the downside in crude oil prices. The Organization of Petroleum Exporting Countries and the International Energy Agency forecast a rebound in global oil demand in 2023. OPEC expects the global oil demand to rise 2.5 mln bbl per day in 2023, while IEA raised its demand growth estimate by 1.7 mln bpd to 101.6 mln bpd.
* Outlook for the evening session:
–MCX contract is seen at 6,200-6,500 rupees per bbl
–NYMEX contract is seen at $72.45-$75.50 per bbl
End
US$1 = 82.76 rupees
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Aditya Sakorkar
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