Crude Jumps, WTI Futures Up From One-Month Low

Crude........

MCX Crude oil futures edged up today, witnessing a strong bounce in afternoon as supportive economic data from Eurozone lifted the battered commodity. The mood in Asian equities was grim after a meek Chinese manufacturing data but the WTI futures were boosted in the afternoon. The commodity edged up from lows near $91 per barrel and currently quotes at $92.87, up 90 cents per barrel. Prices had tested their one month low of $91.26 per barrel on the day.

The economic situation in the euro area “remains challenging” and the European Central Bank doesn't expect much of an improvement before the end of this year, ECB President Mario Draghi said today, according to media reports. Draghi noted that he sees a few signs of a possible stabilization but persisted that ECB's baseline scenario continues to be one of a very gradual recovery starting in the latter part of this year. Draghi vehemently defended the central bank's controversial policy measures - the purchase of government bonds to support those countries that submit to euro-zone adjustment programs.

Markets are under a spell of global monetary easing that leaves valuations vulnerable to changes in sentiment, the Bank for International Settlements (BIS) warned Sunday, according to media reports. The BIS, effectively a central bank for central banks, has long sounded the alarm over dovish policies pursued by the Federal Reserve, the Bank of England, the Bank of Japan and other central banks.

Earlier in the day, HSBC Chinese manufacturing PMI indicated a continued contraction and led oil lower. The final version of the HSBC China manufacturing Purchasing Managers' Index for May fell to 49.2, down from a preliminary reading of 49.6, and more than a point off from April's 50.4. Oil was also hurt by a massive 3.70% correction in Japanese stocks.

However, the commodity took a turn around after the euro zone's manufacturing PMI rose unexpectedly last month. In a report, research group Markit said the euro zone's manufacturing PMI rose to 48.3, from 47.8 in the preceding month. Equities bounced and industrial commodities like Copper and oil remained well bid. MCX Crude oil futures edged up, breaking above Rs 5200 per barrel and moved up nearly Rs 100 to test a high of Rs 5301 per barrel. The open interest in the counter rose by nearly 11%, indicating good fresh buying.

Source by Commodity Insights