Chennai: The escalating tensions in the Middle East saw a spurt in the prices of crude, natural gas, gold and silver on Monday. Analysts warn that prices could move further northwards if the tensions remain heightened.
In the Multi Commodity Exchange, crude prices gained 8.5 per cent to Rs 6600 per barrel from the Friday closing level of Rs 6092. West Texas Intermediate (WTI) prices moved up 7.6 per cent on Monday, a day after Iran supreme leader Ayatollah Khamenei died in a US-Israeli strike. It had gone up to $75.43 a barrel in the morning but cooled down after the OPEC countries announced their plan to increase April output by 206,000 barrels per day, around 0.2 per cent of the global demand. Brent crude too had gone up to $82.37/bbl in the morning but came down to $78.45 later in the day.
“Increased production by OPEC will not solve the supply situation as ships are not moving through the Strait of Hormuz, which is used for carrying roughly 20 per cent of global oil,” said Ajay Kedia, MD, Kedia Commodities.
If WTI prices move towards $92.40, Indian crude prices can see levels of Rs 7800 per barrel as oil from other sources like Venezuela add to the shipment cost.
Natural gas prices climbed 4 per cent to Rs 300 MMBtu, as prices in the international market crossed $3.5. This was mainly due to the movement in crude prices. With the winter season receding in the US and Europe, the demand for natural gas is subdued. However, if tensions continue till the restocking period in April, prices can move up faster.
Gold and silver made gains due to geo-political tensions. Gold in the MCX gained around Rs 7000 per 10 gm as it moved up to Rs 1,69,000. Silver too gained 5 per cent to touch Rs 2,97,000 per kg. In the international market, gold was trading at $5380 levels as silver at $97. “If tensions continue, gold prices can shoot up to $6180 and silver to $110. However, any effort to de-escalate tension will see prices falling off from these levels,” he said.
Meanwhile the dollar index too gained on Monday to 98.60 as safe haven demand triggered purchase of greenback along with gold and silver. Aluminum was another metal that made gains on Monday due to supply concerns. Some of the agri commodities were trading lower in the fear of lower consumption by the Middle East.
Disclaimer : This story is auto aggregated by a computer programme and has not been created or edited by DOWNTHENEWS. Publisher: deccanchronicle.com
