Informist, Thursday, Jun 16, 2022
By Sayantan Sarkar
MUMBAI – Oil prices in India and abroad fell today as the US Federal Reserve hiked interest rates late on Wednesday, while a rise in stockpiles of crude in the US soured the mood in the market.
* The Fed raised the federal funds rate target range by 75 basis points to 1.50-1.75%, in line with the market's expectation, and said it would hike rates aggressively in the rest of the calendar year.
* Higher interest rates are likely to lower purchasing power of the consumers in the country, and loans will get expensive. This may drag down demand for crude oil in the US, the biggest consumer of the commodity.
* Meanwhile, the US Energy Information Administration said that crude oil inventories in the US rose by 2 mln barrels last week. This weighed on prices further.
* At 1845 IST:
--June contract on the Multi Commodity Exchange of India was down 2.1% at 8,961 rupees per bbl.
--July contract on the New York Mercantile Exchange was down 0.5% at $114.7 per bbl.
* "The supply/demand situation, higher natural gas prices, the squeeze on refined products, and lost Russian production, all mean that oil prices remain constructive at these levels for now," Jeffrey Halley, senior market analyst Asia Pacific, OANDA, said in a note.
* According to reports, Libya's oil output has declined to just 150,000 bpd from 1.2 mln bpd as political unrest continues to curb supply. This may aggravate the supply situation in international markets, given that crude supply from Russia has also declined drastically.
* Outlook for the evening session by HDFC Securities:
--MCX contract is seen at 8,750-8,980 rupees per bbl
--NYMEX contract is seen at $112-$119 per bbl
End
US$1 = 78.07 rupees
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Shirsha Thakur
Cogencis news is now Informist. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.
Informist Media Tel +91 (11) 4220-1000
Send comments to feedback@informistmedia.com
© Informist Media Pvt. Ltd. 2022. All rights reserved.
