Supply fears lift Crude oil futures

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Supply fears lift Crude oil futures
Crude oil futures ended higher in the domestic market on Wednesday as investors and speculators booked fresh positions in the energy commodity as deepening unrest in Iraq raised fears over a disruption in crude supplies from OPEC's second biggest crude producer.

The unrest in Iraq spread to Kirkuk, the northern region's oil hub as a car bomb claimed the lives of atleast seven people and wounded 20, reports said.

The US eased export restrictions on ultra-light oil, easing pressure on abundant domestic supplies in the world's biggest economy. Pioneer Natural Resources said that it has received approval from the Commerce Department to classify stabilized condensates as petroleum products that are eligible for export.

US crude oil stockpiles rose last week, signaling weakening demand for the fuel in the world's biggest crude oil consumer, curbing gains in the fuel. US crude oil stockpiles rose 1.74 million barrels to 388.1 million barrels last week, the EIA said.

However, mostly weak US economic data darkened the demand outlook for the fuel, trimming gains in crude futures. The world's biggest economy shrank the most in five years as GDP contracted an annualized 2.9 per cent in Q1 2014, compared to a prior reading of 1 per cent contraction. US durable goods orders fell 1 per cent in May 2014 over the previous month.

However, services in the US rose at the fastest pace in more than four and a half years in June 2014 as the Markit Services PMI climbed to 61.2 from 58.1 in May, with a reading above 50 signaling expansion.

Crude oil futures may rise today ahead of the US jobless claims data which may show an improving US job market outlook.

At the MCX, Crude Oil futures, for the July 2014 contract, closed at Rs 6,428 per barrel, up by 0.44 per cent, after opening at Rs 6,427, against a previous close of Rs 6,400. It touched an intra-day high of Rs 6,472.

Dion Global Solutions

Read more about: crude oil, mcx
Story first published: Thursday, June 26, 2014, 12:50 [IST]
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