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Oil prices are holding near $76 a barrel as recovery from COVID-19 in many countries is leading to resurgent demand for fuels. Supply, however, has stayed pat so far as the Organisation of Petroleum Exporting Countries (OPEC) maintained output.
The OPEC+ (which includes other oil producers like Russia) grouping is meeting on Thursday to consider production targets starting from August. Analysts are expecting the group to raise supplies. The quantum of the raise is a key question. While the consensus seems to suggest that it will raise output by 500,000 barrels per day, some analysts opine that nothing short of one million barrels per day will cool prices.
The revival of a nuclear deal between Iran and P5+1 (the US, the UK, China, France, Russia and Germany) which will allow the former to export crude will also weigh on oil prices in the coming days.
Rising crude prices, of course, are not a good sign for India with its heavy import dependence and increasing inflation. No wonder then it has requested OPEC+ to raise supplies. But a smarter way to lower retail fuel prices is to cut taxes, one of our columnists argues here.
Rising inflation will also make it harder for the Reserve Bank of India to maintain an accommodative stance of monetary policy. As it is, the central bank is going to extremes to keep the yield on the benchmark 10-year government bond anchored around 6 percent. Is this security any longer the true benchmark, we ask. Read more here.
Do check out these investing insights from our research team:
Ashok Leyland -- In a sweet spot to ride the economic recovery
IFGL Refractories: Fortunes tied to steel cycle
Bodal Chemicals: Benzene benefit to show up from FY24
What else are we reading today?
PharmEasy is just what the doctor ordered for Thyrocare
Ties with China — Contradiction in confrontation
Monsoon Watch 2021: signs of normalisation
Rising market uncertainties to test investors
(Republished from the FT)
Technical picks : ICICI Bank, PI Industries, SBI and IRCTC
These are published every trading day before markets open and can be read on the app)