Monday, November 30, 2015

Oil Bears Continue to Rule the Roost
Commodity Updates - Crude oil futures plunged more than 1 per cent in the domestic market on Friday as investors and speculators exited positions in the energy commodity tracking a bearish trend in the overseas market as a stronger dollar amidst the expectation of higher US interest rates curbed the lure for the fuel as an alternative asset, while worries over a worsening supply glut also weighed.
A stronger greenback restricts the demand for oil by making it more expensive for those holding other currencies.
US crude supplies rose for the ninth week on the trot, with total storage levels at 488.2 million barrels, the highest for this time of the year in at least the past 80 years, signaling that the market remains oversupplied.
Speculation that the OPEC, which accounts for about 40 per cent of global crude supplies, may stick to its current production target and refrain from slashing output despite calls from some members to support tumbling oil prices, also soured sentiment. Some OPEC officials have stressed that the cartel won’t change its no-cut policy unless non-OPEC members such as Russia also become party to the plan and cut production. The OPEC will meet on December 4, 2015.
A slump in China’s industrial profits signaled fears of a hard landing in the world’s second biggest economy, clouding the demand outlook for the fuel. China’s industrial profits fell by 4.6 per cent, year on year in October 2015, government data showed.
Oil may extend losses today as traders continue to weigh worries over a supply glut despite heightened geopolitical tensions surrounding the oil-rich Middle East region.
At the MCX, Crude oil futures, for the December 2015 contract, closed at Rs 2,821 per barrel, down by 1.05 per cent, after opening at 2,854, against the previous close price of Rs 2,851. It touched an intraday low of Rs 2,816.