Crude at a 3-month high on OPEC supply cut, Indian gold imports rise & Venezuela to double oil exports to India

09th Feb – 15th Feb

1. Indian rupee lost ground on oil rally and equity sell-off

February 15, 2019

The rupee lost ground after the crude oil rally and sell-off in Indian equities continued for the seventh day. Oil gains, with Brent crude closing at nearly a 3-month high, buoyed by reports of further reductions to global output and optimism around constructive U.S.-China trade negotiations. The US Dollar Index tumbles to daily lows near 97.00 on US data. US retail sales plummeted 1.2% MoM in December.

Source: Deccan Chronicle

2. US oil rig count increases to 854, market may be well supplied

February 09, 2019

US oil companies added 7 oil rigs for the week ending February 8th making a total count of 854. US Crude oil production may remain high this week. Market eyes are now on the weekly inventory report. That followed a decline of 15 in the oil-rig count a week earlier. The total active US rig count also edged up by 4 to 1,049.

Source: Reuters

3. Scrap gold supply may increase in India as gold reaches multi-year high

February 08, 2019

Scrap gold supplies in India may increase this quarter as a rally in local gold prices has prompted consumers to sell old trinkets and jewellery. The country’s scrap supplies for the quarter ending March are forecast to rise above 25 tonnes from 14.1 tonnes during the same period a year ago

Source: Reuters

4. India gold imports jumped in January as re-stocking begins for the wedding season

February 11, 2019

Jewellers are re-stocking gold in the form of ornaments for the wedding season, which was the key reason behind the increase in Indian imports of gold in January. In the interim budget, the government gave the benefits of direct cash transfer and increased allocation to MGNREGA to farmers which are likely to boost the rural economy. This may lead to a further rise in demand during the wedding season.

Source: Bloomberg

5. Venezuela seeks to double oil exports to India from 300,000 barrels per day now

February 12, 2019

Sanction-hit Venezuela wants to double its oil sales to India and is open to barter payment arrangements with the world’s third biggest crude consumer. Venezuela buys medicines and other products from India, and is looking for alternative payment methods after the United States imposed stringent sanctions on Venezuela. Venezuela aimed to double oil supplies to India from 300,000 barrels per day (bpd) now.

Source: Financial Express

6. Saudi believes that oil market will balance by Q1’19 after production cut measures

February 11, 2019

Saudi believes that the oil market should reach a balance between supply and demand in the first quarter of this year. OPEC, Russia and other non-OPEC producers agreed in December to reduce supply by 1.2 million bpd from January 1. Even Iran, Libya and Venezuela registered falls in output as a result of unrest and trade sanctions.

Source: Live-mint

7. OPEC oil supplies drop almost 800,000 barrels per day in January to 30.81 million bpd

February 12, 2019

OPEC said its oil output fell almost 800,000 barrels per day in January to 30.81 million bpd. This is still slightly more than the demand OPEC expects for its crude on average in 2019. OPEC cut its forecast for 2019 world economic growth by 0.2 percentage points to 3.3 percent and highlighted a range of headwinds such as a slowdown in global trade.

Source: Reuters

8. Saudi Arabia will reduce oil production to 9.8 million bpd in March’19

February 12, 2019

Saudi Arabia says it will reduce oil production to nearly 9.8 million barrels per day in March, well below its production quota under a deal to cap output. Oil prices are receiving support amid OPEC-led supply cuts and US sanctions against Iran and Venezuela. Although the upside is capped due to the trade war between the US and China, and this would continue to weigh in on oil demand.

Source: CNBC