Commodity Weekly Insights : Energy RoundUp By Geojit Financial Services
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CRUDE OIL REPORT
Global Crude oil benchmarks moderated after posting a monthly decline in October. The prices languished near the recent lows as supply concerns driven by Middle East tensions eased, while recent U.S. job data raised hopes that the Fed is done with hiking interest rates in the biggest oil consuming economy
Global Economy
• The key global equity gauges were broadly over positive territory last week.
• The Federal Reserve held interest rates steady at 5.25-5.50% in last week’s meeting.
• U.S. Non-farm payrolls increased by 150,000 for the month. The unemployment rate rose to 3.9%, the highest level since January 2022, amid a drop in household employment.
• China’s NBS purchasing managers' index (PMI) dropped to 49.5 in October, undermining expectations for a stabilizing Chinese economy.
Currencies
• The dollar index settled last week at 105.02 shedding 1.44 percent.
• Euro gained 1.56 percent, Japanese Yen gained 0.15 percent while Chinese yuan gained 0.23 against USD last week.
• Indian Rupee inched up against USD and settled at 83.14 last week.
Energy
• Crude oil prices in global platforms marked a monthly fall in October.
• OPEC oil output has risen for a third straight month in October led by increases in Nigeria and Angola.
• Saudi Arabia and Russia reaffirmed their commitment to extra voluntary supply cuts until the end of the year.
Outlook
Crude oil prices are expected to get support from a constrained supply, as Saudi Arabia and Russia stick with their voluntary cuts. However, OPEC oil output has risen for a third straight month in October led by increases in Nigeria and Angola, the countries that are exempted from output cuts. As the winter approaches, lesser gasoline demand amid constrained supply conditions may keep the prices range bound.
Technical View
NYMEX Crude: Extending rebound above 85 may strengthen the prices further. Weakness expected below 80.
MCX Crude: Voluminous surge above 7030 region may strengthen the momentum. Weakness expected if prices dip below 6620 region.
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