Tuesday, January 5, 2016

Mcx crude Oil slips due to weak US, China factory data

Crude oil futures ended lower in the domestic market on Monday as investors and speculators weighed heightened tensions in the Middle East amidst a Saudi-Iran spat over the execution of a well-known Shiite cleric by Saudi Arabia, and steep factory contractions in the US and China, which threatened to cast uncertainty over the demand outlook for the fuel from the world’s top two economies.

While a Saudi-Iran spat may cause some short-term volatility in oil prices amidst worries over supplies from the crude-rich Middle East region, in the long-term the diplomatic row may push oil prices lower with both countries unlikely to work together to support prices. Iran is aiming to produce as much as 1.5 m barrels of oil each day current year as it awaits the lift-off of West-imposed sanctions.

Producing activity in the US(United States) shrank at the fastest pace in more than 6 years, with the ISM’s factory gauge falling to 48.2 in Dec from 48.6 in Nov, while US(United States) construction spending dropped 0.4 per-cent in Nov month, signaling a faltering recovery in the world’s biggest economy that may curb fuel requirement.

Oil may expand losses today amidst fears that a slowing world wide economy may sap fuel demand.

MCX : Crude oil futures, for the Jan 2016 contract, ended at Rs 2,465 per barrel, went down by 0.60 per-cent, after unlocking at 2,494, against the previous close price of Rs 2,480. It attained an intraday low of Rs 2,433.

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