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India Crude: Up tailing NYMEX on higher-than-expected US stock fall

Wednesday, Aug 21

 

By Shrea Paul

 

MUMBAI – Crude oil contracts on the Multi Commodity Exchange of India rose, tracking the New York Mercantile Exchange, analysts said. Crude contracts rose on NYMEZ due to a higher-than-expected fall in US crude inventory.

 

At 1644 IST, the September contract on MCX was 1.3% higher at 4,071 rupees a barrel and the October delivery contract on NYMEX was up 1.1% at $56.77 a bbl.

 

US crude oil inventory fell 3.5 mln bbl to 439.8 mln in the week ended Friday, data from the American Petroleum Institute showed on Tuesday. This was higher than an expected 1.9-mln-bbl decline.

 

Inventory data from the US Energy Information Administration is due for release later today.

 

"The latest price rise is fundamentally justified, in our opinion. The oil market is currently under-supplied and will remain so for the rest of the year. We, therefore, envisage further upside potential for prices," a report by Commerzbank AG said.

 

Prices were also supported by data showing lower exports from Saudi Arabia in June. Saudi Arabia's oil exports declined to 6.72 mln bbl per day in June, down 220,000 bpd down from May, the report said citing data from the Joint Organisations Data Initiative.

 

According to reports, Saudi Arabia was likely to keep its oil exports below 7 mln bpd in August as well.

 

Earlier, sentiment was dampened by a bearish monthly report by the Organization of the Petroleum Exporting Countries, which slashed its forecast for 2019 demand growth for the second time in three months. It also cut its projection for global economic growth.

 

OUTLOOK

The MCX contract is seen at 3,920-4,120 rupees for the rest of the session, and the NYMEX contract at $54.87-$57.67, Angel Commodities said in a report.  End

 

US$1 = 71.53 rupees

 

Edited by Subham Mitra

 

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