MCX crude oil futures stayed under pressure today as a weak global economic outlookkept the commodity under pressure in world markets. Supply worries have been pressingcrude lower off late. The United Arab Emirates’s oil minister noted yesterday thatOPEC would stand pat on oil production despite the falling prices. The commodity isholding near a six year low around $45 per barrel for the WTI futures. WTI Crude isquoting at $45.08 per barrel, down 81 cents per barrel on the day. MCX Crude oil futuresare trading at Rs 2807 per barrel, down Rs 19 per barrel on the day.
Following another disappointing year in 2014, developing countries should see an uptickin growth this year, boosted in part by soft oil prices, a stronger US economy, continuedlow global interest rates, and receding domestic headwinds in several large emergingmarkets, says the World Bank Group’s Global Economic Prospects (GEP) report, releasedyesterday. After growing by an estimated 2.6% in 2014, the global economy is projected toexpand by 3% this year, predicts the Bank’s twice-yearly flagship report.
Oil was hit by panic after media reports stated that billionaire businessman and princeof the Saudi royal family Alwaleed bin Talal said that it is unlikely to see $100-a-barreloil again. He admitted that Saudi Arabia and all of the countries were caught off guardwith the rapid drop in the oil prices. No one anticipated it was going to happen, notedthe Prince. Oil is down around $60 per barrel in last six months.
The US Energy Information Administration (EIA) said Tuesday that the pace of US oilproduction should be able to hold the current momentum. US crude output averaged 9.2million barrels a day in December, it said in a monthly report. US oil production willaverage 9.3 million barrels a day in 2015 and 9.5 million barrels a day in 2016, the EIAindicated.
In a latest update, the World Bank stated that it expects the average price of oil in2015 to be roughly 30% less than it was in 2014. This should boost global output by 0.5%in the medium term, says the bank. Oil-importing emerging markets, including India,Indonesia, South Africa stand ready to gain the most, as growth accelerates and theircurrent account deficits narrow.
However, some bargain buying emerged in Natural gas as the US winter season neared itspeak. The commodity is quoting at 2.973 per mmbtu, up 1.40% on the day, witnessing goodbuying support around its two year low. MCX Natural gas futures are trading at Rs 186.20per mmbtu, up Rs 5.50 per mmbtu or 3% on the day.
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