Crude Oil Prices Trade under Pressure in the Indian Market
After the uncertainty that the OPEC+ talks have caused the price of Crude oil is expected to remain volatile. Without a clear statement from OPEC, oil may continue to fluctuate. However, rising concerns about the delta variant of the coronavirus and the prospect of increased supply may weigh on prices
Due to the possibility of slower demand growth, crude oil prices came under pressure on the morning of July 12. This was due to the rise in Delta variant cases and delayed OPEC+ nations’ verdict overproduction quota. Last week, the energy commodity fell by Rs. 41 which translates to almost 0.73% in the national stock market.
Black gold continued to fall, flattening the gap, and trading at a daily low after starting to follow a weak global trend.
On the Multi Commodity Exchange of India for July crude oil shipments fell by Rs 78 rupees which are 1.4 in percentage. It fell to Rs. 5,476 per barrel, yielding 5,450 lots. Shipments for August fell by Rs. 77 rupees, or 1.39%, to 5,444 rupees per barrel in 977 batches.
So far, the July and August contracts that have been sold are worth Rs. 9.2306 billion and Rs. 298.5 million, respectively. The West Texas Intermediate crude witnessed a drop of 1.6% to $73.37 per barrel. On the other hand, the London-based international benchmark tumbled by 1.55% which reflected as $74.38 per barrel.
According to Ravindra Rao, the price of oil on the New York Mercantile Exchange fell by about 1% to around US$73.9 per barrel. Rao is the senior vice president of Commodity Research, CMT, EPAT at Kodak Securities.
Rao added that this was a continuation of the decline after the market opened. Crude oil trading was mixed, supporting China’s monetary easing, dollar fluctuations, stable inventories, and a decline in US crude oil inventories. This was offset by OPEC’s uncertainty, increased fears about the virus, and the surge in the number of US oil rigs to the peak in April 2020. Without a clear statement from OPEC, oil may continue to fluctuate; however, concerns about the virus and prospects are increasing. He further said that Increased supply may curb price pressure.
Crude oil prices fell due to slower demand growth, which led to the Organization of the Petroleum Exporting Countries’ (OPEC)’s decision to stagnate and lead to a decline in supply.