Informist, Monday, Jul 11, 2022
By Sayantan Sarkar
MUMBAI – Oil prices in India and abroad fell 2% today due to concerns about lower demand from China as the country reported its first case of Omicron subvariant in Shanghai.
* China has a zero-tolerance policy against COVID-19, and the authorities in the city are likely to conduct mass testing over the next few days. This has raised concerns among investors for another set of lockdowns in the world's top importer of crude oil.
* "Crude oil prices traded down reversing some gains from the previous session, as worries about a recession and China's COVID-19 curbs hitting demand outweighed ongoing concerns about tight supply," said Tapan Patel, senior analyst at HDFC Securities.
* At 1651 IST:
--July contract on the Multi Commodity Exchange of India was down 2.0% at 8,146 rupees per bbl.
--August contract on the New York Mercantile Exchange was down 2.2% at $102.51 per bbl.
* Supply of crude oil has been falling for a while now as Russian output has slumped after western powers imposed heavy sanctions on it, following its invasion of Ukraine. Russian President Vladmir Putin has warned that more sanctions against Moscow's oil exports may have dire consequences for the energy market, according to a report in Investing.com.
* Meanwhile, the Organization of the Petroleum Exporting Countries and allies have little spare output capacity to offset lower supply from Russia, which has further added to concerns.
* Outlook for the evening session:
--MCX contract is seen at 7,980-8,260 rupees per bbl
--NYMEX contract is seen at $98-$107 per bbl
End
US$1 = 79.43 rupees
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Sushmita Mukherjee
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