Supply glut fears deepen Oil’s pain
30/12/2014 09:36
Crude oil futures slumped in the domestic and overseas market on Monday, falling deeper into bear market as investors and speculators exited positions in the energy commodity amid fears that a global supply glut may continue to persist through the first half of 2015 with US production near three-decade highs and OPEC resisting output cuts.
Further, Libya, the holder of Africa’s biggest oil reserves extinguished fire at three of the country’s six oil storage tanks at the country’s largest oil port, easing concerns over dwindling supplies from the African nation.
A stronger dollar, which hit a two-year high against the euro, also curbed the demand for the fuel as an alternative asset. Stronger greenback makes crude more expensive for those holding other currencies, thus dimming demand.
Manufacturing activity in the Texas region grew at a weaker than expected pace in December, signaling a slowdown in the world’s biggest economy this quarter, clouding the demand outlook for the fuel. The Federal Reserve Bank of Dallas on Monday reported that its general business activity index, a gauge of manufacturing declined to 4.1 in December from 10.5 in November, with a reading above zero signaling expansion.
Crude futures may fall today amid speculation that US oil stockpiles may have remained at high levels last week, signaling weak demand for the fuel in the world’s biggest oil consumer.
At the MCX, Crude oil futures, for the January 2015 contract, closed at Rs 3,414 per barrel, down by 3.75 per cent, after opening at Rs 3,555, against the previous close price of Rs 3,547. It touched an intraday low of Rs 3,396 till the closing.
30/12/2014 09:36
Crude oil futures slumped in the domestic and overseas market on Monday, falling deeper into bear market as investors and speculators exited positions in the energy commodity amid fears that a global supply glut may continue to persist through the first half of 2015 with US production near three-decade highs and OPEC resisting output cuts.
Further, Libya, the holder of Africa’s biggest oil reserves extinguished fire at three of the country’s six oil storage tanks at the country’s largest oil port, easing concerns over dwindling supplies from the African nation.
A stronger dollar, which hit a two-year high against the euro, also curbed the demand for the fuel as an alternative asset. Stronger greenback makes crude more expensive for those holding other currencies, thus dimming demand.
Manufacturing activity in the Texas region grew at a weaker than expected pace in December, signaling a slowdown in the world’s biggest economy this quarter, clouding the demand outlook for the fuel. The Federal Reserve Bank of Dallas on Monday reported that its general business activity index, a gauge of manufacturing declined to 4.1 in December from 10.5 in November, with a reading above zero signaling expansion.
Crude futures may fall today amid speculation that US oil stockpiles may have remained at high levels last week, signaling weak demand for the fuel in the world’s biggest oil consumer.
At the MCX, Crude oil futures, for the January 2015 contract, closed at Rs 3,414 per barrel, down by 3.75 per cent, after opening at Rs 3,555, against the previous close price of Rs 3,547. It touched an intraday low of Rs 3,396 till the closing.
