23 Feb 2011 Commodity Market Updates 23:57
Today, Crude Oil caught fire and Gold shone. On MCX, Apr expiry Crude made a new high of Rs.4545 with a 4.17% rise and ended at 4494.
Crude oil prices surpass US$100 for the first time since October 2008 as traders scramble to buy up future supplies amid fears that Libya's unrest could bring the country's exports to a halt.
On the other hand, Gold shoot up today and made a new high of 21012 on Apr month contract on MCX and ended at 20956. Similarly Silver made a high of 50389 today on MCX.
Prices of oil and non-oil commodities rose considerably in 2010 in response to strong global demand and supply shocks for select commodities. Crude oil prices, after averaging $97 (Rs4,384) a barrel in 2008, declined to $61 the following year.
But, in 2010, strong demand growth, especially in countries that are not a part of the Organisation for Economic Co-operation and Development (OECD), again pushed up crude oil prices to an average $76 a barrel. Currently, crude oil is trading in the international market at $87 a barrel (West Texas Intermediate, or WTI, crude futures) and $102 a barrel (Brent). According to estimates, the upward pressure on prices is likely to persist in 2011. Global oil demand during 2011 is expected to go up by 1.7% to 89.1 million barrels per day (mmbopd).
The crude oil forward curve for WTI indicates a long-term price nearing $98 per barrel. In India, oil prices move in tandem with the trends in the international market. After dipping to an average of $69 per barrel in 2009-10, the Indian crude oil basket is currently pegged at $79 per barrel.
Deregulation of petroleum prices
In June, after recommendations from several expert groups, the government deregulated petrol prices while maintaining status quo on other sensitive petroleum products with partial price revisions. Since then, marginal price changes have been effected on sensitive petroleum products.
In spite of periodical price revisions, there is an under-recovery to oil companies across all the sensitive petroleum products. In the current fiscal year, oil marketing companies are estimated to record a revenue loss of Rs72,000 crore. As per the agreed one-third sharing formula, till date the government has reimbursed Rs24,000 crore in two tranches and another Rs14,400 crore has been paid by upstream companies by way of discounts. Oil marketing companies are not in a position to bear more than Rs12,000 crore of revenue losses and the government would have to compensate the overall shortfall of Rs36,000 crore.
Crude oil prices surpass US$100 for the first time since October 2008 as traders scramble to buy up future supplies amid fears that Libya's unrest could bring the country's exports to a halt.
On the other hand, Gold shoot up today and made a new high of 21012 on Apr month contract on MCX and ended at 20956. Similarly Silver made a high of 50389 today on MCX.
Prices of oil and non-oil commodities rose considerably in 2010 in response to strong global demand and supply shocks for select commodities. Crude oil prices, after averaging $97 (Rs4,384) a barrel in 2008, declined to $61 the following year.
But, in 2010, strong demand growth, especially in countries that are not a part of the Organisation for Economic Co-operation and Development (OECD), again pushed up crude oil prices to an average $76 a barrel. Currently, crude oil is trading in the international market at $87 a barrel (West Texas Intermediate, or WTI, crude futures) and $102 a barrel (Brent). According to estimates, the upward pressure on prices is likely to persist in 2011. Global oil demand during 2011 is expected to go up by 1.7% to 89.1 million barrels per day (mmbopd).
The crude oil forward curve for WTI indicates a long-term price nearing $98 per barrel. In India, oil prices move in tandem with the trends in the international market. After dipping to an average of $69 per barrel in 2009-10, the Indian crude oil basket is currently pegged at $79 per barrel.
Deregulation of petroleum prices
In June, after recommendations from several expert groups, the government deregulated petrol prices while maintaining status quo on other sensitive petroleum products with partial price revisions. Since then, marginal price changes have been effected on sensitive petroleum products.
In spite of periodical price revisions, there is an under-recovery to oil companies across all the sensitive petroleum products. In the current fiscal year, oil marketing companies are estimated to record a revenue loss of Rs72,000 crore. As per the agreed one-third sharing formula, till date the government has reimbursed Rs24,000 crore in two tranches and another Rs14,400 crore has been paid by upstream companies by way of discounts. Oil marketing companies are not in a position to bear more than Rs12,000 crore of revenue losses and the government would have to compensate the overall shortfall of Rs36,000 crore.
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