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Crude oil prices climb on positive US fuel demand data

Oil prices bounced back on Thursday after dropping by more than a dollar a barrel the previous day, supported by stronger fuel demand data from the United States, the world’s top oil consumer. Brent crude futures rose by 56 cents, or 0.7%, to $76.97 a barrel by 0330 GMT, while U.S. crude futures rose 53 cents, also up 0.7%, to $73.09.

A sharper-than-expected drop in U.S. gasoline inventories boosted prices, reflecting stronger demand for transport fuels in the U.S. However, investors remained cautious as rising global interest rates continued to drive recessionary fears.

“Brent crude prices have managed to regain some footing lately from previous oversold technical conditions, but progress has somewhat stalled with unresolved (global) banking jitters putting sentiment in check,” said Yeap Jun Rong, a market strategist at IG. Ongoing downside risks to global growth conditions could squeeze prices into a range moving forward, with the need for a more concrete catalyst for another push higher, said Yeap.

The latest U.S. data showed consumer prices rose in April, increasing the likelihood that the Federal Reserve will maintain higher interest rates, which can have the knock-on effect of reducing oil demand. Meanwhile, U.S. gasoline inventories fell by 3.2 million barrels last week, more much more than the 1.2 million barrel draw forecast by analysts, the latest data from the U.S. Energy Information Administration showed.

Distillate stocks also declined, while U.S. jet fuel demand rose to its highest level since December 2019. Still the uncertain economic backdrop clouds prospects going forward, said analysts at ANZ. “While U.S. inflation eased more than expected in April, there are fears the impact of recent rate hikes is only now surfacing in the U.S. economy,” the ANZ analysts said, adding bearish sentiment continues to permeate commodities markets amid lacking signs of stronger demand.

Meanwhile, investors are also eyeing detailed talks on raising the U.S. government’s $31.4 trillion debt ceiling that kicked off on Wednesday, with Republicans continuing to insist on spending cuts. The standoff has rattled investors, sending the cost of insuring exposure to U.S. government debt to record highs, as Wall Street grows more concerned about the risk of an unprecedented default.

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Gold Price Today, 9 May: Gold to be range-bound; investors eye US CPI for rate hike clues

Gold Price Today, Gold Price Outlook, Gold Price Forecast: Gold rate is trading higher on Tuesday, while the silver rate is up 0.12%. On Multi Commodity Exchange, gold June futures were trading at Rs 61,061 per 10 grams, up Rs 134 or 0.22%. Silver May futures were trading higher by Rs 95 at Rs 77,174 per kg on MCX.

Globally, the yellow metal prices flitted in a narrow range on Tuesday ahead of U.S. inflation data, which investors will scrutinize for clues on the Federal Reserve’s policy path, according to Reuters. Spot gold was up 0.3% at $2,027.08 per ounce, as of 0520 GMT. Prices traded in a tight range of about $8. U.S. gold futures were unchanged at $2,033.90.

Gold prices to trade higher

“Post ending the previous week on a higher note, gold price continued the momentum in the new week, as the metal inched 0.24 percent higher and ended at $2021.4 per ounce. Gold gained strength on Monday, reclaiming some ground after a loss the previous day and ahead of inflation data this week that could provide indications on the outlook for US interest rates.

“According to last Friday’s payrolls data, US job creation quickened in April, indicating ongoing labor market resilience. We expect gold to trade higher towards 61,410 levels, a break of which could prompt the price to move higher to 61,810 levels,” said Prathamesh Mallya, AVP- Research, Non-Agri Commodities, and Currencies, Angel One.

Gold prices to fluctuate within narrow range
“Gold rate edged higher with spot gold at Comex was trading up by 0.12% at $2023 per ounce in the morning trade. In the previous session, gold price rose around 0.22% and silver price gained amid a weaker dollar and to pare some of Friday’s losses as traders wound back bets that the Federal Reserve would cut rates later this year. However further upside capped investors looking for more US macro data. Investors’ focus will be on US consumer inflation data for April, due on Wednesday, which could offer a clearer picture of whether the Fed’s interest rate increases are cooling inflation or not.

“We expect gold prices and silver rate should fluctuate within a narrow range before US consumer inflation data. Comex spot gold likely trades in the range of $2005 to $2035 per ounce. Comex spot gold having support at $2005/$1995 per ounce and resistance at $2035/$2050 per ounce. MCX Gold June future having supports at Rs 60,700/60,580 per 10 gram and resistances at Rs 61,300/61,540 per 10 grams,” said Saumil Gandhi, Senior Analyst (Commodities), HDFC Securities.

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Rupee falls 2 paise to close at 81.80 against US dollar

The rupee pared initial gains to settle lower by 2 paise at 81.80 (provisional) against the US dollar on Monday, tracking a recovery in crude oil prices.

Forex traders said the rupee consolidated in a narrow range as the gains from weak American currency and positive domestic equities were negated by a recovery in crude oil prices.

At the interbank foreign exchange, the local unit opened on a positive note at 81.76 but pared early gains to settle 2 paise lower at 81.80 against the US dollar despite a firm trend in domestic equities.

During the day, the rupee touched a high of 81.70 and a low of 81.82 against the American currency.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.07 per cent to 101.13. Brent crude futures, the global oil benchmark, advanced 1.93 per cent to USD 76.75 per barrel.

The rupee depreciated today on a sharp recovery in crude oil prices. However, the weak US Dollar and positive domestic equities cushioned the downside, said Anuj Choudhary – Research Analyst at Sharekhan by BNP Paribas.

The US Dollar declined amid renewed concerns over the banking sector.

“We expect the rupee to trade with a slight positive bias on the rise in risk appetite in global markets and the weak US Dollar. FIIs have remained net buyers over the past seven consecutive sessions.

“However, recovery in crude oil prices may cap sharp upside. Investors may remain cautious ahead of inflation data from India and the US later this week. We expect USD/INR spot to trade in between 81.20 to 82.20 in the near term,” Choudhary said.

In the domestic equity market, the 30-share BSE Sensex advanced 709.96 points or 1.16 per cent to close at 61,764.25. The broader NSE Nifty rose 195.40 points or 1.08 per cent to settle at 18,264.40.

Foreign Institutional Investors (FIIs) were net buyers in the capital market on Friday, as they purchased shares worth Rs 777.68 crore, according to exchange data.

Meanwhile, India’s foreign exchange reserves jumped USD 4.532 billion to USD 588.78 billion for the week ended April 28, the Reserve Bank of India said on Friday. The overall reserves had dropped USD 2.164 billion to USD 584.248 billion in the previous week.

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