MARKETS VIEW

Sell USDINR Around 64.05 TGT 63.85 SL 64.12

MARKETS VIEW

Crude falls sharply amid decreasing U.S. rigs, Saudi supply concern



Crude plummeted on Friday as WTI futures closed below $60 for the first time in nine sessions, amid a dwindling U.S. rig count and bearish strategic positioning from Saudi Arabia's energy minister. On the New York Mercantile Exchange, WTI crude for August delivery plunged 0.88 or 1.44% to 59.95 a barrel. Texas Long Sweet futures traded in a tight range between 59.25 and a peak of 60.90. For the week, WTI crude declined more than 0.75% falling back slightly after surging 1.50% in the week ending June 12. On the Intercontinental Exchange (ICE), brent crude for August delivery fell 1.23 or 1.91% to 63.03 a barrel. Brent crude also fell for the week, plunging more than 2.5% from its level at Monday's open. The spread between the international and U.S. domestic benchmarks of crude stood at $3.08, slightly below its level of $3.25 on Friday morning. In U.S. afternoon trading, crude prices extended earlier losses after oil services firmBaker Hughes (NYSE:BHI) said the U.S. oil rig count fell by four last week to 631, marking the 28th consecutive week of weekly declines. U.S. oil rigs are now at their lowest level since August, 2010. The pace of decline, though, continues to slow as last week's draw represented the smallest -
reduction since December. Industry observers have placed less emphasis on U.S. rig counts in comparison with recent years, as U.S. shale producers continue to remove inefficient rigs while maintaining output. A controversial decision by Opec in November to keep its supply ceiling above 30 million barrels per day triggered an arms race of sorts with the U.S. for global market share. On Thursday, Saudi Arabia oil minister Ali Al-Naimi said in St. Petersburg that his country has roughly 1.5 million-2 million barrels of daily reserves and is ready to increase production if demand rises. While U.S. crude production has touched record levels throughout 2015, the Energy Information Administration expects it to level off in the second half of the year. In its Short-Term Energy Outlook released last month, the EIA projects U.S. output to average 9.4 million barrels per day in 2015, before declining to 9.3 million bpd for 2016. A spike in crude prices is beneficial for shale producers due to its high marginal costs. The U.S. Dollar Index, which measures the strength of the dollar versus a basket of six other major currencies, reached a session-high of 94.70 in U.S. morning trading before falling slightly back to 94.39, up 0.20%. Dollar-denominated commodities such as crude become more expensive for foreign purchasers when the dollar appreciates. The dollar moved higher on Friday, as traders continued to digest dovish comments from Federal Reserve chair Janet Yellen earlier this week.
(Investing)

MARKETS VIEW

NYMEX crude flat after API data reported, market looks ahead to EIA
 The American Petroleum Institute reported U.S. gasoline and crude oil inventories both fell 2.9 million barrels last week, Reuters said. More closely watched figures come Wednesday from the the U.S. Energy Information Administration (EIA), which said last week that crude inventories fell for the sixth consecutive week to 470.6 million, its highest level at this time of the year in at least 80 years. The EIA's report on Wednesday could show that crude stockpiles for the week ending on June 12 fell by 1.8 million barrels. On the New York Mercantile Exchange, WTI crude for August delivery rose 0.01% to $60.45 a barrel. Overnight, crude futures were mixed amid a stronger dollar and concerns related to Tropical Storm Bill. On the Intercontinental Exchange (ICE), Brent crude for August delivery fell 0.24 cents or 0.37% to $63.71 a barrel on Tuesday. Brent futures wavered between 63.44 and 64.40 on a choppy day of trading. Meanwhile, the spread between the international and U.S. domestic benchmarks of crude stood at $3.25, below Monday's level of 3.95. U.S. stockpiles typically fall at this  time of year as refinery capacity increases ahead of the busy summer driving season. Last week, U.S. refineries surged to 94.6% of total capacity, its highest level in weeks. The significant inventory draws, though, are seen as bullish for crude, which experienced historic levels of oversupply throughout the winter. In addition, on Friday oil services firm Baker Hughes (NYSE:NYSE:BHI) said U.S. oil rigs fell by seven last week to 635, marking the 27th consecutive week of weekly declines. The count is down markedly from its level last fall when it peaked above 1,600, as drillers continue a push to take inefficient rigs offline. In a monthly report, the U.S. Department of Commerce said the number of building permits for future home construction surged nearly 12% to an eight-year high at 1.28 million units. Although monthly housing starts dipped 11.1% to 1.04 million units, the Commerce Department upwardly revised an already robust figure from April to 1.17 million units. Dollar-denominated commodities such as crude become more expensive for foreign purchasers when the dollar appreciates. Investors await potential market-moving comments from Janet Yellen on Wednesday, following the completion of the Federal Open Market Committee's two-day June meeting. Although the Fed has not ruled out a June interest rate hike, it is more likely that the FOMC will wait until its September meeting before it raises its benchmark Fed Funds Rate for the first time in nearly a decade. (Investing)