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Oil rebounds on supply fears

By Religare
|

Crude oil futures surged in the domestic and overseas market on Thursday as investors and speculators booked fresh positions in the energy commodity as heightened violence in Libya, Africa's biggest oil reserves holder and a continued strike by the United Steelworkers Union (USW) who declined a proposal from Shell, as the biggest US oil refinery strike since the 1980s extended into a fifth day, raised fears over tighter supplies.

 

Saudi Arabia, the world's biggest oil exporter, cut prices for its Asian buyers to the lowest level in at least 14 years but raised rates for its US and European buyers.

Easing monetary policy conditions in China amid the first reduction in reserve requirements for banks since 2012 bolstered the demand outlook for the fuel in the world's second biggest oil consumer.

Investors cast aside an uptick in US jobless claims last week which signaled a cooling job recovery in the world's biggest economy. The number of Americans who filed for unemployment benefit claims rose by 11,000 to 278,000 in the week ended January 31, 2015.

The US posted the biggest trade deficit since November 2012 in December 2014 amid a pickup in motor vehicle imports and fewer overseas sales. The US trade gap increased 17.1 per cent to USD 46.6 billion in December from a revised USD 39.8 billion in November.

Oil may fall today amid caution ahead of US jobs data.

At the MCX, Crude oil futures, for the February 2015 contract, closed at Rs 3,187 per barrel, up by 4 per cent, after opening at Rs 3,045, against the previous close price of Rs 3,064. It touched an intraday high of Rs 3,223 till the closing.

Story first published: Friday, February 6, 2015, 12:40 [IST]
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