CRUDE SHOCK
Traders are bracing for a record-smashing summer that will shake up commodities
Prices for some of the world’s most vital commodities — natural gas, power and staple crops like wheat and soy — are climbing.
Rising price of staples fueled India's inflation the most in FY24, says RBI report
The surge in food and beverage prices has emerged as a key factor driving India's inflation in the fiscal year 2024, according to the Reserve Bank of India's (RBI) annual report. The report reveals that the contribution of the food and beverages category to overall inflation increased to 60.3 percent for 2023-24, up from 46 percent the previous year.
Oil tests central banker nerves with Iran-Israel hostilities on ‘knife edge’
The strikes reported around targets in Isfahan prompted a jump of more than 4% in crude to above $90 a barrel, before erasing that gain to trade lower on the day as Iranian media seemed to downplay the incident. While central bankers won’t have lost sleep at the level it reached, the backdrop isn’t comforting.
What impact will escalated tensions in Western Asia have on oil prices? Vandana Hari answers
So, all that we can expect in the coming hours is a lot of volatility. Well, the new fear premium that has crept into crude will more or less remain intact but expect even heightened volatility.
India's crude oil import bill drops 16% but import dependency hits new high
India's crude oil imports declined by 16% in the fiscal year ending March 31 due to lower global rates, but import dependency hit a new high at 87.7%. Despite stable domestic production at 29.4 million tonnes, India spent USD 132.4 billion on crude imports. Fuel consumption surged to a record 233.3 million tonnes.
Oil breathes easy on troop withdrawal move
Oil has rallied recently on escalating tensions in the Middle East and supply shocks, raising the prospect of the global benchmark reaching triple figures.
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Oil at $100? Will oil prices hit a century this summer as a global shortage takes hold?
Oil prices surged above $90 a barrel due to military tensions between Israel and Iran, compounded by global supply shocks. Mexico cutting crude exports and other disruptions are intensifying fears of inflation. This supply crunch is turbocharging an oil rally, potentially pushing Brent crude to $100, impacting global economies and Biden's reelection chances.
If crude goes above $90, should equity markets begin to feel the heat? Anand Tandon answers
Anand Tandon says we should be monitoring oil prices for potential energy cost increases and warns of pressure on equity markets. He further suggests smoother housing cycle uptake through housing finance and advises caution on Zomato's premium valuation. Further, he analyses Q4 updates from smaller banks, highlighting the importance of stability in banking.
Oil jumps 4% at $80.57/bbl as tankers avoid Red Sea after strikes
Oil prices leaped 4% on Friday, as oil tankers diverted course from the Red Sea following overnight air and sea strikes by the United States and Britain on Houthi targets in Yemen after attacks on shipping by the Iran-backed group.
First rupee payment for oil to UAE: India looks for more deals, no targets: Officials
India's first payment in rupees for oil bought from the UAE marked a step toward making the local currency more global. Officials noted this push but clarified that there are no specific goals. With over 85% oil dependency, India aims to buy affordably, diversify sources and honor global commitments.
No impact of Israel conflict on Indian economy via oil prices; taking steps to minimise effect of global shocks: Finmin
In a written reply in the Rajya Sabha, minister of state for finance Pankaj Chaudhary also said the government has been successfully adopting measures to mitigate global shocks on the domestic economy over the past three-four years.
OPEC+ suppliers struggle to agree on cuts to oil production even as prices tumble
The OPEC oil cartel, joined by Russia, aims to negotiate crude oil production cuts amid recent price declines. While U.S. drivers benefit from lower fuel costs, OPEC+ nations face economic strain as efforts to stabilise prices falter. Analysts foresee challenges as the group grapples to reach a consensus on production cuts, delaying their meeting in attempts to secure an agreement.
'Recurring and overlapping food price shocks continue to keep headline inflation vulnerable'
Governor of the Reserve Bank of India (RBI), Shaktikanta Das, has said that periodic shocks to food prices continue to make headline inflation in India susceptible. The Monetary Policy Committee (MPC) maintained its 5.4% inflation estimate for this fiscal year, which is a moderate decrease from 6.7% for 2022–2023.
Commodity Talk: Sugar rates at 12-year highs on supply shortages, high crude prices: Harjeet Singh Arora of Mastertrust
Sugar Prices surged ahead of the festive season and wedding season. The government took various measures such as imposing restrictions on the sugar export in order to control rising sugar prices. During the festive season, the government is not expecting any sharp increase in any food-related items. We expect that the measured will not hit ethanol blending as the government is focused and committed to 20% ethanol blending by 2025."
World Bank sees oil lower in 2024, but wider Middle East war could spike them
The World Bank's latest Commodity Markets Outlook report noted that oil prices have risen only about 6% since the start of the Israel-Hamas war, while prices of agricultural commodities, most metals and other commodities "have barely budged."
Interest rates will stay high for now, says RBI Governor Shaktikanta Das
The Indian economy has developed resilience, enabling it to withstand large shocks and navigate an increasingly turbulent global landscape, the governor said, urging banks and financial institutions not to lower their guard.
Recent surge in crude oil prices and bond yields poses challenge, says RBI Guv Shaktikanta Das
Reserve Bank of India Governor, Shaktikanta Das, has identified three challenges facing the global economy: slow moderation in inflation, slowing growth with obstacles, and risks of financial stability. He expressed concerns about the impacts of shocks such as rising crude oil prices and bond yields, stating that they hamper the responses of central banks.
India can ride out Gaza war impact on crude: IMF ED KV Subramanian
The International Monetary Fund's executive director, KV Subramanian, believes that India will be able to handle the spike in crude oil prices caused by the conflict in Gaza. He stated that India's strong handling of the pandemic and its balanced approach to supply and demand measures have positioned the country well. However, he noted that higher oil prices may require additional measures to address inflation. Subramanian also mentioned that the impact on interest rates and the proposed Middle East-Europe logistics corridor is yet to be assessed.
Indian inflation seen easing to 5.50% in September on softening food price rises: Poll
The RBI kept monetary policy unchanged on Oct. 6 for a fourth consecutive meeting and signalled interest rates would remain high until inflation was closer to 4%, the midpoint of the central bank's 2-6% target range.
RBI's hawkish stance, rise in crude prices could delay monetary easing
Professional forecasters, essentially economists surveyed by the Reserve Bank in September 2023 expect headline CPI inflation to moderate from 6.6 per cent in September quarter to 5.5.
Traders don't expect a big crude shock just yet
Crude traders don't expect a massive price surge as there's no immediate threat to supply. But all eyes are on Iran, a major oil producer and key backer of the Hamas group that launched this weekend's offensive on Israel.
US rates, Dollar & Crude: How a rare trinity could pose a significant macro challenge to India
In combination, the three macro-indicators could support already high inflation across many countries by making goods and fuel imports costlier, and disrupt capital flows across the globe, imposing more hardship on debt and current account-stressed countries.
View: China may get caught in an oil-price crossfire
The battle between authoritarian states and democracies in the new Cold War is centered around petroleum as a weapon. However, higher oil prices caused by output cuts by Russia and Saudi Arabia may backfire on them. China, the largest source of additional oil demand, is at a crucial moment in its energy transition and its gasoline demand is expected to peak this year. Every dollar added to the oil price will lead to a faster drop in long-term demand from their most important market, including India.
‘Vasudhaiva Kutumbakam’ in stock markets: Let’s explore market interconnectedness
In this highly interconnected environment, local financial shocks and events can be easily amplified and turned into global events.
Oil market surges on shock output cuts
Several OPEC member-countries led by Saudi Arabia have unexpectedly agreed to reduce their oil production by more than one million barrels per day from May 2021 to the end of the year, signalling their desire to curb a recent fall in crude prices. The cuts come despite the fact that the group and Russia had also cut production by two million barrels per day in October 2020, which angered the US
Finmin report says Russia-Ukraine crisis poses inflation risk in FY23
The government is exploring all viable options, including import diversification, to procure crude at an affordable price, the finance ministry's Department of Economic Affairs said in its monthly report for March.
RBI’s forex reserves to help India ward off oil shock: Indranil Sengupta, CLSA
“The RBI’s forex reserves are around $680 billion including forwards. We think $600 billion is adequate and so RBI has $80 billion of excess reserves with which it can easily fund excess outflows of $30-50 billion due to oil price rise. Whenever we had an oil shock earlier, we did not have forex reserves and had to go to the IMF. We are in a far better situation now.”
Crude shock! Paint stocks tumble up to 11%
Santosh Meena, Head of Research, Swastika Investmart said paint stocks are tumbling as there is a double whammy situation for them where boiling crude oil prices is a key challenge because it will dent the margin as crude is one of the key raw materials for the paint companies.
Russia energy chaos triggers biggest market shock in decades
Bloomberg's gauge of raw materials was set for its biggest weekly gain since at least 1960 as sanctions on Russia scared off buyers. Coal racked up an unprecedented 80% rally, European natural gas broke price records and oil futures swung in the widest range in three decades.
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