Crude may trade between USD 61-71/bbl

Nifty BSE | NSE 25/05/12 Are Mutual Funds betting on Nifty?

If OPEC comes out and cuts production for the second time, is when you could see some support into prices for the coming week, it would be between USD 61/bbl to USD 71/bbl that you would see crude prices trading then.

 

Here is a verbatim transcript of Manisha Gupta's comments on CNBC TV18. Also see the accompanying video.

 

Crude doesn't looks strong even at these levels. It has seen a decline of 35% in the month of October. A bit of short covering yesterday came in because of November expiry. In case of gasoline, heating oil and the equity market saw a bit of rebound but then the fuel demand, the inventories all these factors are really bearish for the prices right now. Only if Organization of the Petroleum Exporting Countries (OPEC) comes out and cuts production for the second time, is when you could see some support into prices for the coming week, it would be between USD 61/bbl to USD 71/bbl that you would see crude prices trading then.

 

The strength in US dollar, speculation that the global recession will curb demand for these industrial metals, all of that is weighing on the prices. The London Metal Exchange (LME) index of 6 industrial metals that is down 27% this month alone and we have seen very sharp decline happening in case of copper which is down 38% in October, Aluminium is down 16%, Nickel is down 26% and most of these base metal prices are below their cost of production and a bit of more decline is, what you can expect in the coming week as well because there is just no demand, which is out there to support prices even at these levels.