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Thursday, October 29, 2009

Oil Submerges Below $78 On Heavy Retreat In Markets; Demand Concerns

Crude oil dropped below the $78 a barrel mark on as Asian markets retreated very steeply today. The surge in the inventories and concerns over the fuel demand also increased the weight of the bears in the market.
Asian share markets were solidly lower Thursday after large declines on Wall Street sapped investors' appetite for risk.

Japan's Nikkei 225 was down 2.1% with Australia's S&P/ASX 200 off 2.4% and South Korea's Kospi Composite down 2.6%. Hong Kong's Hang Seng Index had fallen 2.6% while the Shanghai Composite was down 1.2% and Taiwan's main index off 2.8%.

Light sweet crude for December delivery was seen trading at $77.06 a barrel. On Wednesday, US Energy Department report showed that U.S. gasoline stockpiles climbed 1.62 million barrels last week and inventories of crude oil rose 778,000 barrels to 339.9 million. Fuel demand dropped 0.8% to an average of 18.5 million barrels a day last week, the report showed. 

In currency markets the euro managed to recover after falling to a low of $1.4683 against the U.S. dollar, with the single currency at $1.4718 from $1.4704 late in New York, and at Y132.90 against the Japanese yen, from a low of Y132.81 and Y133.55 in New York.

MCX November oil futures are trading down Rs 6 at Rs 3675 per barrel. The traders may sell the counter on rallies towards Rs 3680-85 levels with the target of Rs 3655 and stop loss of Rs 3700.
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