Mcx commodity tips: A resurgent US dollar took toll on Crude oil as energy traders indulged in a massive sell-off in the fuel in the domestic and overseas market on Tuesday, pulling prices down by more than 3 per cent. Stronger dollar curbed the demand for the fuel as an alternative asset. Stronger greenback makes oil more expensive for those holding other currencies, thus dimming demand.
The dollar strengthened after better than expected US housing data eased concerns over a slowdown in the world’s biggest economy, powering the lure for risky assets. US housing starts surged to the highest level in more than seven years, up 20.2 per cent to a 1.14 million annual rate in April 2015.
Despite severe fighting in Syria, Yemen and Iraq, with Islamic State Militants strengthening their foothold in Libya, crude supplies from the oil-rich Middle East are increasing, exasperating fears over a global supply glut. Saudi Arabia, the world’s biggest oil producer, said that the country pumped in a record 10.3 million barrels per day of oil in March.
However, US supplies continued to ease, with oil stockpiles falling 5.2 million barrels in the week ended May 15, 2015, the American Petroleum Institute (API) reported late Tuesday.
Oil may rebound today as government data shows a further dip in US crude oil stockpiles.
At the MCX, Crude oil futures, for the June 2015 contract, closed at Rs 3,737 per barrel, down by 3.11 per cent, after opening at Rs 3,859, against the previous close price of Rs 3,857. It touched an intradaylow of Rs 3,728 till the closing.
