Gold Silver Reports — Crude Oil has been recovering after the devastating hurricane Harvey shut down refineries in the US over the past week pushing gasoline prices higher and oil prices lower.
Gasoline refining has been one of the key drivers for oil over the recent months despite increasing US production and lack of OPEC compliance. WTI futures are trading higher by almost 3% at $48.66/bbl whereas domestic prices are at Rs.3,125, up 2.53%.
Keeping the volatility aside, oil prices are recovering as fast we saw it go down. Hurricane Harvey shut down almost half of the refining capacity along the Gulf Coast which erased refining demand for crude oil during the event week but prices were back up after reports indicated that refineries are back online and that should bring in renewed demand for oil prices. Another hurricane, Irma, projected to a category 5 is expected to make landfall this weekend and that is also expected to boost prices.
Recent reports also showed that OPEC and Russia were in talks to decide on whether to extend the production cut beyond March 2018. More than the production cuts, the market is looking forward to the compliance reports scheduled this month which could indicate how able OPEC was in implementing its quotas. API and EIA are also due to release their oil forecasts tomorrow.
We would like to mention that Crude Oil is one of the commodities that seems to be purely driven by sentiment – all the rumours, positive news flow is working for oil prices right now and that should see prices move higher significantly before the actual report pushes prices lower on profit booking. The short term trend is positive and we see Rs.3,100 as a crucial level for oil prices below which the current strength could be negated whereas, on the upside, we see Rs.3,200-Rs.3,230 as a potential target zone in the coming days. — Neal Bhai Reports