Thursday, July 24, 2008

NYMEX Oil Marginally Higher; MCX Dips On Rupee - July 24, 2008

Rupee continued to pressurize the Indian commodities. MCX Crude oil August futures are trading down nearly 2% or Rs 96 at Rs 5246 per barrel in the early Asia electronic session. International oil futures are however trading above $124 a barrel. Surge in the gasoline supplies during the peak summer driving season led to this breakdown in the crude oil futures yesterday. Also no news of the storm dolly getting converted into hurricane and no fresh supply concerns from Iran added more pressure on oil.

Yesterday, the U.S. Department of Energy (DOE) said that crude oil supplies were down 1.6 million barrels last week to 295.3 million barrels and 100,000 barrels were added to the Strategic Petroleum Reserve. Supplies of gasoline were up 2.9 million barrels and heating oil supplies were up 1.2 million barrels. September crude oil fell $3.98 to $124.44, the lowest close in six weeks. The DOE also said that refinery use fell from 89.5% to 87.1% of capacity last week. Over the past four weeks, gasoline demand was down 2.4% from a year ago while distillate demand was up 3.6%.

NYMEX Light sweet oil futures for the upfront month contract are trading up 6 cents at $124.51 per barrel. The counter may find good support near the 123 levels and a break of that may take it to 121 levels. Similarly the MCX August oil futures may find very good support near 5170 levels and fall below that may take it to 5095 levels.

The movement in the currencies also hurt the crude oil futures. The Indian Rupee rose to as high as 41.82 against the US dollar exerting pressure on the India oil futures. On the other hand strength in the US dollar against other currencies pressurized the international oil futures, which are denominated in the US dollar.

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