Oil prices fall 3% to hit 2-month low as fresh demand concerns outweigh supply cuts; Brent at $82/bbl
₹6,508 per bbl, having swung between ₹6,504 and ₹6,730 per bbl during the session so far, against a previous close of ₹6,826 per barrel. -On the demand side, China's crude oil imports in October showed robust growth both year on year and month on month, but its total exports contracted at a quicker pace than expected. The expectations of crude run reductions by China-based refiners between November and December could also limit oil demand and exacerbate price declines.
-World shares, which often trade in tandem with oil, lost steam on Tuesday as investor enthusiasm about a peak in global interest rates faded. The US dollar has also ticked up from recent lows, making oil more expensive for holders of other currencies. -Minneapolis Federal Reserve President Neel Kashkari on Tuesday doused hopes of early rate cuts, saying the US central bank may have to do more to bring inflation back down to its 2 per cent target.
Investors are awaiting comments from Fed Chair Jerome Powell, who is due to speak on Wednesday and Thursday. -Markets are also waiting to see if Saudi Arabia and Russia are ready to rein in production voluntarily beyond the end of the year in addition to a broader deal among the OPEC producer group. The current supply cuts of 1.3 million barrels per day will continue till the end of 2023.
Analysts noted that crude oil prices recovered from 3-month lows in the international markets after hefty fall in the last two weeks. Crude oil prices recovered after Saudi Arabia and Russia reaffirmed on Sunday that its voluntary output cuts remain continue until end of this year. Crude prices also recovered after decline in the US oil rig counts last week.
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