Oil prices rose slightly tracking a rebound on Wall Street

Oil prices rose slightly tracking a rebound on Wall Street, though a gloomy demand forecast from IEA limited gains; Morgan Stanley positive on OMCs, says oil has started a negative correlation to the depreciating dollar

Oil prices rose slightly tracking a rebound on Wall Street, though a gloomy demand forecast from the International Energy Agency limited gains. Crude rises above $ 58. Nymex Crude makes low at $ 56.55/bbl. The factors being decline in dollar and strength in equity markets. Decline in crude inventories was seen, which is still up 18% on 5-year average. There is a weak demand and high supply. OPEC compliance to quota at 77% in April, was 82% in March. IEA cut global demand estimate by 3% to 83.32 m barrels/day. Near term range for crude is seen between $ 56-62/bbl.

Research firm Morgan Stanley says that oil has started a negative correlation to the depreciating dollar and that most Asian equities are discounting price range of $ 65-75 a barrel. The brokerage is positive on OMCs like HPCL, BPCL and IOC. For Reliance, Morgan Stanley maintains a price target of Rs 2286 per share. They are however negative on ONGC. They are also equal weight on Cairn India which is most sensitive to price changes.

No related posts.