Showing posts from June 13, 2021

Psychological booster for crude oil markets: covid-19 infections in India in decline

  The crude oil price dipped on Thursday and it was solely attributed to the weaker-than-expected US economic data that in turn made the US dollar stronger. The mood in the markets was not lifted up, even after a relatively successful summit between President Biden and President Putin in Switzerland; that was not something expected either – at least by the media. The talks over the JCPOA, 2015 Iran nuclear deal, meanwhile, are continuing in Vienna, Austria, in its sixth round and the Iranian delegation was much more hopeful about an agreement yesterday, as never before. This could have been a trigger to push crude oil price downward on Thursday, something that is still continuing on Friday. Both WTI and Brent went down by 1.32% and 1.572% respectively before the markets closed on Thursday. Despite the palpable uncertainty in the crude oil markets, there is a glimmer of hope for the battered Indian economy: the Coronavirus infections are in decline and so are the deaths. Sin

Significant Crude Oil Inventory Draw Predicted: oil price keeps rising

  The API, American Petroleum Institute, in its latest forecast, indicates a significant crude oil draw for the week ending June 10. The same from the EIA, the US Energy Information Administration, is yet to be released for the same period. The API figure, 8.573 million barrels, is more than twice what the analysts were expecting for the same period – 3.29 million barrels. Although the forecasts by the analysts and the API used to diverge somewhat occasionally, in the previous week the figures came very close; the forecasts by the API and those of the EIA too used to diverge from each other on some occasions. The inventory draws by the EIA in the recent past clearly show that the demand of crude oil is on the rise steadily; its consistency may have given fresh hopes for the beleaguered oil producers to be back in the business with a high degree of certainty, having been battered for months due to falling oil price. The cumulative draw of US crude oil inventories stand at 22 mil

Rate of oil price surge: will the politicians get involved again to cap the price?

  The price of crude oil is steadily rising and its ceiling, if any, is anybody’s guess at present, because getting a perfect prediction by analysing past data, by means of an Excel spreadsheet or the ‘best’ available ML algorithm, is like predicting the exact date and ferocity of the first Atlantic hurricane. The unpredictable nature of outbreaks of the Coronavirus across the world, even in places that we thought it was under control, clearly shows endless data-crunching can become redundant unless we identify every single factor that determines a given event. The prediction of the price of crude oil in the international markets is no different. Who can predict the exact price of crude oil in two weeks’ time – with or without a model? This is the nightmare faced by both analysts and traders alike in the volatile commodity markets. When the price of crude oil rises at this rate, the oil producers are understandably come under immense pressure and they in turn look for a scapego

Iran forms trilaterals, and quadrilaterals with its neighours to woo investment in energy sector

  As the talks to revive the 2015 nuclear deal enters the sixth round in Vienna, Austria, involving the signatories to the deal, Iran does not seem to have   lost its hope for the sanctions being lifted, despite the mixed signals that come from Tehran. There are plenty of indications to support the idea that Iran does want to see an end to the international sanctions so that it can once again become a serious player in the international energy markets. The production of crude oil, as shown by many reliable sources, for instance, has not suffered due to uncertainty over the final outcome of the talks in Vienna; on the contrary, Iran has been ramping up the production for months. The Iranian ambassador to India, meanwhile, has offered India one of its key ports in the Persian Gulf as a base for the strategic oil reserves of the latter and a standalone gas pipeline. Iran has been instrumental in forming ‘quadrilaterals’ and ‘trilateral’ with its immediate neighbours, numbering fou

India sees normalcy returning; rise in oil price causes a political stir, though

  India, having been through one of the deadliest outbreaks of the Coronavirus in the world, is finally seeing a steady decline, both in the rate of infections and deaths. In proportion to the encouraging news, the commercial activities are slowly limping back to normal, despite being nowhere near what it was before the pandemic. As the economic activities pick up the momentum, the multiple rises in fuel price at the pumps are causing frustration at many levels of the government; not only can it skew the recovery path, but also can cause an inevitable political stir across the vast country – when it can least afford one. Although the price hike is in direct proportion to the rise in price in crude oil in the international markets, those who look at it from a political prism stubbornly refuse to believe that it is the case; they try to associate it with ‘bad’ policy decisions. The rise in oil price is causing political ripples in the rest of Asia too. A modest increase in oil pr

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