Angel Commodities has come out with its report on energy. According to the research firm, from an intra-day perspective crude oil prices are expected to trade lower on account of rise in OPEC production coupled with slowdown in the global economy. Crude Oil On a weekly basis, Nymex crude oil prices declined sharply by around 8.5 percent, making oil the worst performing commodity. Crude oil prices slipped below the $83/bbl mark on the back of rising US crude oil inventories coupled with increase in supply of oil from the Organization of Petroleum Exporting Countries (OPEC). Additionally, unfavorable economic data from the Euro Zone and the US, along with slow economic growth from China also exerted downside pressure on prices. Crude oil prices touched a low of $82.29/bbl in the last week and closed at $83.23/bbl on last trading day. On the domestic front, prices declined by 8.4 percent and closed at Rs.4,631/bbl on Friday after touching a low of Rs.4,624/bbl during the week.
News
Latest data from Organization of Petroleum Exporting Countries (OPEC) showed that production increased by 20,000 barrels to an average 31.595 million barrels a day in May from 31.575 million barrels in April. The crude oil output is at highest level since October 2008. OPEC’s biggest crude oil producer Saudi Arabia boosted its output 80,000 barrels to 9.9 million barrels a day in last month which is at the highest level since January 1989. Libya’s output also rose by 50,000 barrels to 1.4 million barrels a day in May, highest level since January 2011. The third biggest increase in OPEC production came from Nigeria where production increased 40,000 barrels a day to 2.18 million barrels a day in the same period.
Outlook
From an intra-day perspective we expect crude oil prices to trade lower on account of rise in OPEC production coupled with slowdown in the global economy. Additionally, a stronger DX will also act as a negative factor for the commodity.
Source: Angel Commodities