Commodity Updates - Crude oil futures plunged nearly 1 per cent in the domestic market on Monday as investors and speculators exited positions in the energy commodity amid speculation that the OPEC, that makes up for about 40 per cent of global crude supplies may refrain from cutting output when it meets this Friday in Vienna as the group continues its policy to defend market share despite tumbling prices, threatening to exacerbate a supply glut.
Some OPEC officials have said 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.
With US supplies at levels unseen for this time of the year for the past eight decades, and the OPEC likely to stick to its current policy, the global crude oil market may remain flooded with oil over the next few months.
With US supplies at levels unseen for this time of the year for the past eight decades, and the OPEC likely to stick to its current policy, the global crude oil market may remain flooded with oil over the next few months.
Meanwhile, contracts to purchase previously owned homes in the US barely increased last month while a gauge of US business activity fell into contraction in November, signaling a cooling recovery in the world’s biggest economy, clouding the demand outlook for the fuel.
US pending home sales index climbed by 0.2 per cent in October from September, when it fell 1.6 per cent. The Chicago PMI, a business barometer, fell to 48.7 this month from 56.2 in October, with a reading below 50 signaling contraction.
Oil may extend losses today as a worsening China factory contraction darkens demand outlook.
At the MCX, Crude oil futures, for the December 2015 contract, closed at Rs 2,798 per barrel, down by 0.82 per cent, after opening at 2,815, against the previous close price of Rs 2,821. It touched an intraday low of Rs 2,788.
