Crude Oil

Crude oil traded with a negative bias towards the beginning of the week and touched a weekly low of $67.15 per barrel in the near term contract on NYMEX. But thereafter it regained all of the lost ground rising $2.76 on Wednesday and $3.04 on Thursday. Crude prices finally closed the week at $73.97, $3.93 or 5.6% above last week’s close.

The rise was boosted by expectations of higher demand given the three day weekend on account of Memorial Day holiday in US. The Memorial Day also marks the beginning of busy season for motorists as driving demand peaks between June-August. Hurricane season is also round the corner which might disrupt production and interrupt supplies.

Oil inventories for the week ended May 21 rose 2.4 mln barrels but the same had insignificant impact on prices.

Currency: USDINR

The rupee depreciated for the first two trading sessions of the week, before appreciating for the rest of the week, closing at Rs.46.35 per dollar (1.3% lower for week), as risk aversion over the euro zone debt crisis receded, bolstering dollar supplies from local exporters while a rally in domestic shares aided sentiment.

The euro gained on month-end fixing demand for euros and ahead of a long weekend in both the US and UK markets. The dollar index against six majors was down about 0.1%.

The People’s Bank of China said a Financial Times report that the State Administration of Foreign Exchange (SAFE) was concerned about its exposure to euro zone debt was groundless, lifting world stocks.

Authors: Praveen Bajaj, Abhijeet Ahir