Crude oil Rises on US Jobless Report, to Trade Lower on Dollar Strength

Nymex crude oil prices increase more than 1 percent yesterday, taking cues from decline in US unemployment claims coupled with Greece political leaders reaching an agreement on austerity measures. Additionally, a weaker dollar also acted as a positive factor for the commodity.

Oil prices touched an intra-day high of $100.18/bbl and closed at $99.8/bbl on Thursday. On the MCX, prices increased by 1.4 percent and closed at Rs.4942/bbl after touching an intra-day high of Rs.4953/bbl on Thursday.

Crude Oil News

The Organization of Petroleum Exporting Countries (OPEC) has cut its 2012 forecast for global crude oil consumption by 120,000 barrels a day to 88.76 million. The US Energy Department (EIA) also reduced its world demand forecast for the year to 89.25 million barrels a day in February from 89.38 million in January.

Outlook

We expect crude oil prices to trade lower today taking cues from negative demand forecast from OPEC and EIA and dollar strength.

Additionally, weak sentiments in the global markets will also act as a negative factor for oil prices today.

Oilseeds complex to remain weak on Friday

Oilseed complex can remain weak for the day as most anticipated supply demand report has not reported in many changes compared to previous month’s estimate and market had already factored these numbers.

Though weekly export sales data from U.S has reported better export numbers it was ignored amidst of the USDA report. Steep surge in domestic prices might also restrict the buyers in physical markets.

Indian market is looking forward for oil imports data which is of more concern. However estimates are higher which would add further pressure to the prices.

Factors to watch out for:

China’s soybean imports ending by June may gain by 8% to 41.3 million tons

Brazil has harvested 6% of the crop compared to 3% as on Feb 3 last year

Meal exports from India dropped by 16% in the month of January

Malaysia’s tax free quota for crude palm oil exports this year is set at 3 million tons

Bio diesel production in 2011 reached 800 gallons compared to 690 gallons in the previous year