Business Standard
Sunday, Jul 05, 2009
drived banner
drived banner
  Advanced Search
Feedback | RSS
Content Guide
Follow us on  
|Markets & Investing|||||||| 
 Section Home | News Now | Paper | Features | Stock Watch | PF News | PF Features | IPOs | MFs | Commodities | Trends | Stock Data | Financials | Money & Forex
Home > The Smart Investor Live Markets | Smart Portfolios
  Search:

Oil below $34 despite Opec cut
BS Reporter / New Delhi December 20, 2008, 0:12 IST

Fears of a deepening recession in global economies destroying demand for crude oil drove down price of the commodity to less than $34 per barrel on the New York Mercantile Exchange, its lowest in over four years.

 
 
News Now
Paper
Specials
- Budget hopes boost Sensex
- Wkly Tech Analysis: Sensex rally seen beyond 15,100
- New Cos Bill to be more clear on role of independent directors
- CPI(M) leader expresses scepticism over several rail projects
- Reservation in pvt sector no answer for the future: Khurshid
- Satyam: Govt moves application in CLB to recall nominated directors
More  

Crude oil prices have ignored a record 2.5 mn barrels per day cut in production by the Organisation of Petroleum Exporting Countries, which supplies 40 per cent of the world’s oil, a Mumbai-based analyst said. Prices have fallen over 22 per cent since the group announced its decision to cut production on Wednesday.

Lower oil prices pushed the share prices of India’s crude oil producers down on the Bombay Stock Exchange as they will now have to sell their oil cheaper. The share price of Oil and Natural Gas Corporation fell 3.23 per cent while that of Cairn India fell 4.26 per cent.

Crude oil refining firms, which buy oil saw their share prices rise. Indian Oil Corp, India’s largest refiner, rose 3.90 per cent on the Bombay stock Exchange. Bharat Petroleum Corporation rose 4.49 per cent and Hindustan Petroleum Corporation rose 1.86 per cent. The benchmark Sensex traded flat on Friday.

The nearest month — January — futures contract of US light sweet crude oil on Nymex fell over 6 per cent on Friday to its second-biggest weekly decline since 2003.

The January contract expires today.

The February contract is trading at $42 per barrel, nearly 16 per cent higher than the January contract. This spread between the two contracts is the widest in the last 20 years.

A wide difference between the prices of the two most recent contracts allows companies and traders to buy oil at lower prices in the most recent contract and lock in higher prices for the later contract. This increases stocks leading to a further decline in prices in the near contract.

The June 2009 contract is trading at over $50 per barrel. Prices of Brent crude oil, the most widely traded variety of oil, rose to around $44 per barrel in London trading. Higher Brent crude oil prices keeps India’s oil import price high as Brent makes up around 38 per cent of the basket.

The Indian basket of crude oil fell by a little over a dollar on Thursday to $41.84 per barrel, the latest day for which data are available. The price of this basket, which also comprises of Oman-Dubai sour grade crude oil, tracks global crude oil prices with a day’s lag.

“Price of the Indian basket will most likely fall below $40 a barrel on Friday,” said another Mumbai-based analyst.

Oil futures slumped in New York as concern mounted that rising stockpiles at Cushing, Oklahoma, will leave little room to store supplies for delivery next year.

Crude oil for delivery in January fell as much as 7.7% to $33.44 a barrel on the New York Mercantile Exchange. The contract expires today.

storypagge
Arrow Other Stories     
- Budget hopes boost Sensex
- Wheat futures rise after govt lifts export ban
- 50,000 in south China evacuated after rains causes floods
- Orders on lie detection plea on July 9
- BSP to launch state-wide protest against fuel price hike
- Centre has failed to tackle naxalite problem: BJP
  Read Business news in 
  The most passionate motoring online website for motoring enthusiasts
  Smart IT Strategies for Uncertain Times
  Renew Your Car Insurance with Tata-AIG AutoSecure
  Choose smart affordable IT solutions and meet customer expectations
  Required : Sales executive at Bangalore, Click here to apply
  Unique Maritime Investment opportunity - U.S. based Group dealing in piracy protection force
  Download the E-book on the Future of Business Intelligence
  Learn Best Practices for improving customer satisfaction
  Know your customers better... download the free e-book on CRM
   Discussion Board / User Comments  (2)  
Display Name  Email-Id  
Post your comment
DP
Oil prices have been inflated for years by opportunists and greed, using fear as tool. ideal price per barrel in my opinion is about $20. Everything else is drummed up marketing scheme. For economy to find its bottom and change direction, prices will have to fall till middle of 2009.
Reply
Vladimir_Pootin
Aw? does the loss of petrodollars mean no more bluster from Russia and Venezuela? Now how is Russia going to fix their rust-bucket Navy for their new ?The USSR is Back? tour? Boy, just when I was really getting into the ?invade my neighbors? thing, too. Maybe I can sell a shltload of my dopey Judo videos to make up the deficit.
Reply
Most Popular
Read
E-Mailed
Commented
   
- Wkly Tech Analysis: Sensex rally seen beyond 15,100
- India joins Russia, China in questioning dollar dominance
- RNRL moves SC to restrain RIL from supplying gas
- Freight corridors not on slow track
- Jaiprakash Hydro to raise Rs 1,500 cr
 
 More  


BS Poll
Cast Your Vote
 
   
 
Are you happy with the Railway Budget?
  Yes  No
Submit

  Hot Searches  
 
Manmohan Singh  |  Pranab Mukherjee |  Sonia Gandhi |  Rahul Gandhi | L K Advani | Congress | Meenakshi Natarajan | Maruti Ritz | LTTE |  Ranbaxy | DMK | Swine Flu |  New Pension Scheme |  Q4 Results |  Tata Nano |  Service tax |  Excise duty |  Sebi | Tech Mahindra |  Election Commission |  Ramalinga Raju |  CitiBank  |  Satyam |  Maytas  |  Reliance |  RBI |  GDP |  Gold |  Ratan Tata |  Bailout plan | ICICI |  Mumbai Terror Attack |  6th Pay Commission |  B-School | Mukesh Ambani | DLF  Sensex | Tax calculator |  Anil Ambani |  Infosys | Home Loan  | Bollywood | Subprime Crisis | Personal Finance |  inflation | oil prices |  World Bank | TCS |  HDFC |  Barack Obama  
 
  Member Area Write to the Editor RSS Archives Advanced Search
  Subscribe to BS print product BS e-paper Newsletter
  BS Products BS Hindi BS Motoring
FOR HOT PRODUCTS
BS Bazaar.com
Home | Markets & Investing | Companies & Industry | Banking & Finance | Economy & Policy | Opinion
Life & Leisure | Management & Marketing | Tech World
About Us | Partner With Us | Code of Conduct | Careers | Advertise with us| Terms & Conditions | Disclaimer | Site Map | Contact Us