India receives its first ever shipment of US crude oil
Mihir Kapadia, CEO and Founder, Sun Glboal Investments
Oil prices are a little lower in early Asian trading as more of the recent gains have been retraced as the US dollar rises and some of the concerns about the broad pullback in the US amid strength in the dollar and renewed concerns over rising global production re-emerge. A recent Reuters poll showed output among OPEC countries rose by 50,000 barrels a day in September, as the cartel's overall compliance with its supply-cut deal fell to 86 per cent. WTI Crude futures are down 0.2 per cent at $50.47 a barrel, while Brent futures are 0.3 per cent lower at $55.96.
India received its first ever shipment of US crude oil on Monday, becoming its latest oil supplier. With oversupply bringing down the market prices, US crude as a cheaper alternative has been finding its way to newer customers in Asia including India, South Korea, Japan, China, Thailand, Australia and Taiwan. The rise in US Crude demand in Asia comes at a time when countries are seeking to diversify their oil imports from other sources after the OPEC cuts drove up prices of Middle East heavy-sour crude. The important fact about US crude imports is that even after the transport costs, the oil is priced competitively compared to Gulf crude, which India has traditionally been buying.
London spot gold prices were close to a two-month low in Asia, weighed by the stronger dollar. There is also lack of physical buying support as China’s markets closed for holidays this week and India's festival demand has been weak in line with their economy.”