Monday, November 2, 2015

Oil Bulls Roar on US Drilling Slowdown

Crude oil futures spiked more than 1 % cent in the domestic market on Friday as investors and speculators booked fresh positions in the energy commodity tracking a trend in the overseas market amid signs that US drillers are curbing production due to an oil price slump, easing concerns over a global supply glut.

Baker Hughes said that the number of rigs drilling for oil in the US fell by 16 to the lowest level since June 2010 to 578 last week, marking the ninth straight drop.

A rise in US consumer sentiment and household spending signaled bright consumer demand prospects from the world’s biggest economy, boding well for oil.

The gauge measuring US consumer sentiment climbed to 90 in October from 87.2 in September while consumer spending climbed 0.1 per cent in October from September when it rose 0.4 per cent.

Further, a gauge measuring manufacturing activity in the US Midwest surged in October as the Chicago PMI shot up to the highest level since January at 56.2 from 48.7 in September, with a reading above 50 signaling expansion.

Oil may fall today as a continued factory slump in China, the world’s second biggest oil consumer, clouds the demand outlook for the fuel.

At the MCX, Crude oil futures, for the November 2015 contract, closed at Rs 3,068 per barrel, up by 1.32 per cent, after opening at Rs 3,013, against the previous close price of Rs 3,028. It touched an intraday high of Rs 3,076.

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