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India Crude:Rebounds on robust economic data from China, weak dollar

Friday, Jul 31, 2020

 

By Sayantan Sarkar

 

MUMBAI – Crude oil prices in India and abroad rebounded today due to robust manufacturing growth in China, the world's largest importer of oil.  

 

* The dollar's weakness against the euro also lifted demand. 

 

* At 1637 IST,

  –The August contract on the Multi Commodity Exchange of India was up 0.6% at 3,011 rupees per barrel.

  –The September contract on the New York Mercantile Exchange was up 0.6% at $40.16 a bbl.

 

* On Thursday, oil prices fell 6% due to poor economic growth in the US, the largest producer of oil. US' GDP saw the sharpest on-record contraction in Apr-Jun, indicating a worrisome state of the economy.  

 

* "Yet again the oil market was 'shown the way' by movements on the stock and FX markets in particular: shares fluctuated considerably in response to the weak US economic data and the US dollar depreciated massively," Commerzbank AG said in a report.

 

* Further, the Organization of the Petroleum Exporting Countries and allies are all set to ease their record high production cuts from Saturday, adding more pressure on prices. 

 

* Outlook for the evening session, by Tapan Patel, senior analyst at HDFC Securities:

  –MCX contract is seen at 2,940-3,080 rupees per bbl

  –NYMEX contract is seen at $39-$42 a bbl

 

* "We expect crude oil trend to remain negative, on account of increasing production from OPEC nations and a weak demand outlook, due to an expected second wave of coronavirus cases," said Abhishek Bansal, founder and chairman of Abans Group.  End

 

US$1 = 74.81 rupees

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Nidhi Chugh 

 

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