Monday, August 24, 2015

Crude Oil Futures Plummeted By More than 2.5 %

Crude oil futures plummeted by more than 2.5 per cent in the domestic market on Friday as investors and speculators shunned the energy commodity as a worsening global slowdown threatened to curb demand for the fuel while the US oil rig count increased for a fifth week on the trot, signaling higher production ahead, which may widen a global supply surplus.

Baker Hughes reported that the number of rigs drilling for oil in the US crept up by two to 674 last week.

Adding to the gloom, manufacturing activity in China contracted at the sharpest pace in more than six years in August, signaling a worsening slowdown in the world’s second biggest oil consumer. A private manufacturing index for China fell to 47.1 in August, from 47.8 in July, with a reading below 50 signaling contraction.

Meanwhile, manufacturing activity in the US expanded at the slowest pace since October 2013 this August, signaling a cooling recovery in the world’s biggest economy that may limit the demand for the fuel. The gauge measuring manufacturing activity in the US fell to 52.9 in August from 53.8 in July.

Oil may extend a bearish ride today as a worsening global stock market rout signaled the fast faltering recovery in the global economy, threatening to cut demand for commodities.

At the MCX, Crude oil futures, for the August 2015 contract, closed at Rs 2,684 per barrel, down by 2.54 per cent, after opening at Rs 2,735, against the previous close price of Rs 2,754. It touched an intraday low of Rs 2,670.

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