MUMBAI (Commodity Online): Crude slumped today, sliding well under $100 per barrel for the WTI futures following a frail undertone in risky assets and reports that Saudi Arabia will increase its oil production.
Last week OPEC kept its oil production unchanged, after the members were unable to reach an agreement about oil production which emerged temporarily bolstered oil's gains as it was widely expected for production to be increase, yet as news emerged late last week that Saudi Arabia will increase its oil production by almost 1.14 million barrels opposing the major OPEC members.
Asian markets were off to a disappointing start for the week today as the massive sell off in the US stock markets and continued jitters pertaining to the global growth worries fanned risk aversion.
The US dollar recorded a smashing rally on Friday and maintained its firm undertone today as well, pulling most Asian stock markets lower along with commodities. The US markets tumbled with traders expressing continued concerns about the outlook for the global economy.
The major averages ended the day sharply lower, at their worst closing levels in well over two months. The Dow plummeted by 172.45 points or 1.4% to close at 11,951.91 points.
This turned the trading environment bearish right from the start today and couple of weak economic data releases kept the risky assets under check. In Japan, the core machinery orders in Japan fell 3.3% over the in April, reflecting the ongoing damage from the devastating earthquake and tsunami on March 11.
In China, the markets dropped but were seen witnessing some bargain hunting at the day's lows and the benchmark Shanghai Composite index managed to end above the watershed 2700 points mark. The monetary tightening moves in China seem to be working.
China's banks extended fewer than expected new loans in May as the country kept up its efforts to rein in rising prices. Chinese banks lent 551.6 billion yuan in new loans in May, compared with 739.6 billion yuan in April, down 25.41%, according to the People's Bank of China.
The US dollar traded in a thin range but remained in a firm mode on the whole, nearing its one week high around 1.4300 against the Euro.
Crude oil fell, extending losses under $100 per barrel mark. The WTI Crude futures are down $1.15 per barrel at $98.14 per barrel right now. The counter had tested a low of $97.81 per barrel.
MCX Crude oil futures are quoting at Rs 4411 per barrel, down Rs 21 per barrel on the day. Prices are likely to hold on in the evening moves with good buying support likely to emerge if Rs 4400 levels hold on.
