Crude oil futures surged by over 3.5 per cent in the domestic market on
Tuesday as investors and speculators booked fresh positions in the
energy commodity amidst speculation that OPEC producers are likely to
make steep cuts in investments that will ease production and stem a
global supply surplus.
An
OPEC official predicted a rebound in oil prices amid steep cuts in
oil investments by OPEC countries that may trim supplies. The OPEC
expects global oil and gas investments to be slashed by 22.4 per cent
in 2015.
The
EIA said that US crude oil output was 120,000 barrels per day lower
in September than in August, predicting production to continue
declining through next August. Speculation of a possible cooperation
between OPEC and Non OPEC producers also bolstered prices.
A
rise in US consumer confidence signaled a pickup in the world’s
biggest economy, lifting the demand outlook for the fuel. The
IBD/TIPP Economic Optimism Index climbed to 47.3 in October from 42
in September.
Investors
shrugged off a reduction in global growth forecasts in 2015 and 2016
by the IMF to 3.1 per cent and 3.6 per cent, respectively, from an
earlier predicted 3.3 per cent and 3.8 per cent.
Oil
may extend gains today after an industry report showed a 1.2 million
barrels drop in US crude oil inventories last week, easing concerns
over a global supply glut.
At
the MCX, Crude oil futures, for the October 2015 contract, closed at
Rs 3,137 per barrel, up by 3.53 per cent, after opening at Rs 3,032,
against the previous close price of Rs 3,030. It touched an intraday
high of Rs 3,179.
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