Crude oil dropped steadily today as investors awaited the outcome of the Federal Reserve’s monetary policy meeting later in the day amid
mixed to weak undertone in world equities. The US weekly crude supplies report is also due and traders played it safe by selling the commodity on modest rises today. The IMF stated yesterday that the global economic recovery has become much more uncertain and policymakers have a difficult, increasingly narrow, line to walk if they are to avoid something very bad happening.
The fund noted in its latest biannual World Economic Outlook that growth in the world economy has decelerated to a 4% pace, a substantial decline from the over 5% growth of 2010. The 4% rate is expected to hold steady in 2012. The projections represent a .3% to .5% reduction from what the IMF was forecasting three months earlier. The principal reason for the global deceleration is the significant slowdown in the United States, which is now expected to grow by only 1.5% this year and 1.8% in 2012. This is a large one-percentage point drop from the IMF’s June outlook.
US dollar gained today as equities dropped and overall risk appetite remained low. The Fed’s Open Market Committee is to conclude its two-day policy meeting later in the day, amid speculation that the central bank could introduce fresh stimulus measures to boost U.S. economic growth. Yesterday, a statement from the Greece’s Ministry of Finance cited satisfactory progress made in a second conference call on Tuesday between Greece’s deputy prime minister and finance minister, Evangelos Venizelos, and the heads of the so-called Troika — the European Union, European Central Bank and International Monetary Fund.
In the electronic moves, the light, sweet crude futures for delivery in November slipped from a high of US $ 86.99 per barrel and currently quotes at $86.20, down 83 cents on the day. Yesterday, the American Petroleum Institute, an industry group, said that U.S. crude inventories rose by 2.57 million barrels, while total gasoline supplies rose by 0.62 million barrels, painting a mixed picture of US energy demand. MCX Crude oil futures for October delivery are quoting at Rs. 4173, up Rs. 3 on the day. The counter has been moving in a very tight range today and could drop later in the evening moves.
Source : www.indiainfoline.com