Home Arrow Commodity News Arrow Gold & silver prices surge, India to build strategic oil reserves

Commodity World Roundup

13th Oct – 19th Oct – Gold & silver prices surge, India to build strategic oil reserves & Iran ships 20 Million barrels of oil to China

Gold & silver prices surge, India to build strategic oil reserves

1. After depreciation, Indian rupee to be moved from US watch list

October 19, 2018

The Federal Reserve is thinking at removing the Indian currency from its monitoring list as the rupee has depreciated significantly against the US dollar. The Indian Current Account Deficit (CAD) worsened after the rupee decline due to India’s continuing dependence on crude oil imports, which are trading at the highest level this year in comparison to the last two years.

Source: Economic Times

2. Indian gold above 32,000, silver also expensive due to festival of Dussehra

October 18, 2018

Following global cues, Indian gold prices are near a 2 years high, as the rupee has dropped significantly against the US dollar which makes imports costlier. Indians traditionally purchase gold during the festival season of Dussehra-Diwali. Gold and Silver purchases are marked as auspicious during these festivals and the upcoming wedding season will further boost the domestic demand.

Source: Economic Times

3. Oil drops on trade tensions

October 18, 2018

Crude oil has fallen almost $8 from its recent high on US and China trade war tensions. The US has imposed imports tariff on China, and with China retaliating with similar actions on US, this is creating trouble for the world economy. OPEC has forecasted crude oil demand to drop further in 2019. The IMF has also warned of a global slowdown next year due to the ongoing trade war.

Source: Reuters

4. Iran ships more than 20 Million barrels to China

October 18, 2018

Importers are buying more oil from Iran ahead of US sanctions. China’s Dalian port is to receive 22 million barrels of Iranian crude in October and November against 1-3 million barrels of oil, which is the average monthly supply. Iran is finding fewer buyers for its crude ahead of U.S. sanctions which will take effect on November 4.

Source: Reuters

5. Lack of policy and concerns from Iran are keeping the Indian economy on the watch

October 17, 2018

India imports 200 million tonners annual and spends near $80 billion on this. If crude oil prices rise by $1 per barrel, it affects India by $1.5 billion. As crude prices have almost doubled during the last two years, it is costing heavily to the Indian economy.

Source: Business Line

6. Strategic oil reserve for 21.5 days Indian oil demand

October 18, 2018

India is working towards building 6.5 million tonnes of additional capacity under government-private partnership by sharing some profits. The government is seeking a $1.5 billion of investment from global oil producers. India will be able to reduce the financial burden by inviting private players, also it will shield the economy against volatile price movements. As per Indian Strategic Petroleum Reserves Ltd, India has already built a 5.03 million tonnes capacity in an earlier phase to meet 9.5 days country’s oil needs in Padur, Visakhapatnam and Mangalore - this strategic move was started in the year 2006. After competition of this new phase, India will be able to meet 21.5 days oil needs.

Source: Financial Express

7. OPEC assures no supply worries to India

October 17, 2018

OPEC Secretary-General Mohammed Sanusi Barkindo was quoted as saying that the market is adequately supplied and balanced and in 2019, there is a possibility of a larger imbalance, due to higher growth in the supply. He also assured that Indian concerns of higher oil prices will be addressed and that there are no worries on the supply side.

Source: Business Standard

8. India’s oil subsidy to rise due to higher crude prices

October 13, 2018

The Indian government’s oil subsidy is set to rise above Rs. 460 billion by the end of September as oil prices have nearly doubled in the last two years. The subsidy for cooking gas is around Rs. 390 billion and kerosene is around Rs. 70 billion; in FY18, subsidy for cooking gas was around Rs. 208.80 billion while for kerosene, it was at 46.72 billion.

Source: Business Standard