Wednesday, July 22, 2015

Crude oil futures posted slim gains in the domestic market

Snapping a prolonged bearish ride, Crude oil futures posted slim gains in the domestic market on Tuesday as a retreat in the US dollar boosted the demand for oil as an alternative asset.Weaker greenback makes Oil cheaper for those holding other currencies, thus lifting demand.Moreover, speculation that an improving American economy will consume more fuel also supported sentiment. National chain-store sales in the US eked out a 0.2 per cent gain in the first two weeks of July from the same period in June, signaling improved consumer demand, boding well for Oil.However, the gains in the energy commodity were limited by a surprise bump in US storage levels which threatened to exacerbate a global supply glut at a time when Saudi production is at record highs while Iran is set to unleash millions of barrels of its crude as soon as sanctions against the Islamic nation are lifted following a landmark nuclear deal with the West last week.The American Petroleum Institute reported that US crude oil stockpiles climbed last week, up by 2.3 million barrels, compared to expectations of a 1.9 million barrels decline.Oil may extend gains today with government data likely to show a drop in US crude supplies.At the MCX, Crude oil futures, for the August 2015 contract, closed at Rs 3,235 per barrel, up by 0.09 per cent, after opening at Rs 3,224, against the previous close price of Rs 3,232. It touched an intraday high of Rs 3,285.
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