Crude oil prices fell on the expectation of further tapering announcement by Fed in the next meeting. Yesterday the commodity fell by 4.10% from the high of $98.97 to $95.34. In December meet fed cut the asset purchase pace by $10 billion and reduced bond purchase to $75 billion. Signs of strengthening economy may encourage Fed to taper more.
Strong USD against its major peers reduce crude oil price at US market while depreciation in other global currencies make crude oil costly to import. DXY rebounded from 80.0 on 30th December and reached to 80.63 on 2nd January. Expansion in Manufacturing and fall in Jobless claims backed USD after last week positive results of consumer confidence and home sales.
Crude oil crossed $100 on 27th December, after two months, and made the high of $100.75 due to falling inventory at US. Crude oil inventory shrank by 10.6 million barrels on December 6, the second lowest after 2nd January's withdrawals, and fell on continuous basis. Today Energy Information Administration will release inventory data which is expected to show fall of 2.3 million barrels. During the holiday week the production might have lowered inventory more than expected.
If today inventory falls below expectation we may see hike in crude oil prices. The commodity may gain near to 1.5-2% after surprising result.
At MCX crude oil fell by 0.50% and with the low of ‚¹5961. Natural Gas is trading near to ‚¹269.90 up by 0.15%. Brent Crude is up by 0.13% after opening at $107.88. Gasoline is up by 0.14% while Natural Gas is down by 0.60%.