Commodity Wrap: Expected US rate decrease, Middle East tensions keep oil prices stable while gold prices surge

 Commodity Wrap: Expected US rate decrease, Middle East tensions keep oil prices stable while gold prices surge

Commodity Wrap: Expected US rate decrease, Middle East tensions keep oil prices stable while gold prices surge

Even with the continuing hostilities in the Middle East, India stands to gain from the notable 18% drop in crude oil prices since September in a number of ways.

Iran refuted US allegations on December 25 that a drone launched from Iran had collided with a chemical ship in the Indian Ocean.

On December 26, there was no movement in oil prices as investors focused on the geopolitical unrest in the Middle East. There was also a feeling of hope for the US Federal Reserve's potential initiation of interest rate decreases. This optimistic forecast is predicated on the idea that a rate reduction of this kind may spur global economic expansion and raise the demand for petroleum.

At $79.13 a barrel, Brent oil futures were down a meager 26 cents, or 0.3 percent, from their peak. US West Texas Intermediate crude, on the other hand, increased by only 3 cents to $73.59 per barrel.

Following the disruption of international transportation and commerce last week due to Houthi assaults on ships, both benchmark oil indexes increased by around 3%.

On December 24, Denmark's Maersk said that it was prepared to start shipping again in the Red Sea and the Gulf of Aden.

Notably, India stands to gain a number of advantages from the notable 18% drop in crude oil prices since September, even in light of the continuing crises in the Middle East. Given how reliant on energy imports New Delhi is, a prolonged decline in oil prices might benefit a number of industries, including the automotive and logistics sectors. Furthermore, it will help to lower the current account deficit (CAD) and inflation.

India has finished paying the UAE for its first shipment of crude oil in rupees.

In a major attempt to increase the acceptability and usage of the Indian rupee around the globe, India, the third-largest energy consumer in the world, made its first payment for crude oil bought from the United Arab Emirates (UAE) in rupees. Did.

More significantly, New Delhi's move to begin paying for its oil imports from Russia in rupees is a component of a broader plan to diversify energy suppliers, lower transaction costs, and establish the rupee as a workable currency for trade settlement. as to install.

The price of gold rose.

On December 26, the US dollar's decline and increasing bond rates contributed to an increase in gold prices. Growing hopes that the Fed may lower interest rates as early as March 2024 had an impact on market mood.

Spot gold increased by 0.5 percent to $2,063.78 an ounce after a two-week high of $2,070.39 earlier in the day. In a similar vein, American gold futures saw a 0.3% gain, closing at $2,074.90 per ounce.