Commodity Analysis

Commodity query

Gurumurthy K | Updated on January 13, 2018 Published on March 12, 2017

Query_icon



Please give some guidelines on how to track crude oil.

Swapan Saha

Crude oil price movement is determined by various factors. The first step is keeping an eye on the production of the Organization of Petroleum Exporting Countries (OPEC).

OPEC controls about 80 per cent of the global oil inventories. Any announcement relating to the OPEC nations’ production will impact crude oil prices accordingly.

In November 2016, OPEC decided to cut production by 1.2 million barrels per day and this decision saw crude oil prices on the New York Mercantile Exchange (NYMEX) surge about 15 per cent in just four trading days from around $45 to $52. Any change in production numbers from the non-OPEC nations will also move prices.

From a trading point of view, the weekly inventory data released by the US Energy Information Administration (EIA) will be another key data to watch. This data is released every Wednesday at 8 pm IST (summer timing) and at 9 pm IST (winter timing) depending on the US daylight savings time.

Higher inventory will pull prices lower and vice versa. This data may cause huge volatility and may jerk the market like it happened recently. Crude oil prices plummeted 8 per cent then in just two trading days after the EIA reported a sharp rise in US inventory.

You can also look for the “Short-term energy outlook”, a monthly report from the EIA to track what is happening in the oil market. Similar to EIA, reports from the International Energy Agency (IEA) are also a good source of information on the possible factors that could drive oil prices.

Political unrest in the oil producing region too will have an impact on oil prices. So, watch out for any such news.

The global growth outlook given by the IMF or other institutions also has a bearing on oil prices as it indirectly hints at the demand for oil.

Lastly, as with any commodity, in general, crude oil prices are negatively correlated to the US dollar movement. But there could be exemptions. For instance, during global uncertainty due to political unrest or the like, crude oil prices could move higher along with the US dollar.

Published on March 12, 2017

A letter from the Editor


Dear Readers,

The coronavirus crisis has changed the world completely in the last few months. All of us have been locked into our homes, economic activity has come to a near standstill. Everyone has been impacted.

Including your favourite business and financial newspaper. Our printing and distribution chains have been severely disrupted across the country, leaving readers without access to newspapers. Newspaper delivery agents have also been unable to service their customers because of multiple restrictions.

In these difficult times, we, at BusinessLine have been working continuously every day so that you are informed about all the developments – whether on the pandemic, on policy responses, or the impact on the world of business and finance. Our team has been working round the clock to keep track of developments so that you – the reader – gets accurate information and actionable insights so that you can protect your jobs, businesses, finances and investments.

We are trying our best to ensure the newspaper reaches your hands every day. We have also ensured that even if your paper is not delivered, you can access BusinessLine in the e-paper format – just as it appears in print. Our website and apps too, are updated every minute, so that you can access the information you want anywhere, anytime.

But all this comes at a heavy cost. As you are aware, the lockdowns have wiped out almost all our entire revenue stream. Sustaining our quality journalism has become extremely challenging. That we have managed so far is thanks to your support. I thank all our subscribers – print and digital – for your support.

I appeal to all or readers to help us navigate these challenging times and help sustain one of the truly independent and credible voices in the world of Indian journalism. Doing so is easy. You can help us enormously simply by subscribing to our digital or e-paper editions. We offer several affordable subscription plans for our website, which includes Portfolio, our investment advisory section that offers rich investment advice from our highly qualified, in-house Research Bureau, the only such team in the Indian newspaper industry.

A little help from you can make a huge difference to the cause of quality journalism!

Sincerely,

Support Quality Journalism
This article is closed for comments.
Please Email the Editor
You have read 1 out of 3 free articles for this week. For full access, please subscribe and get unlimited access to all sections.