Crude oil is trading in a positive manner today, bouncing off its three month lows on bargain hunting and weakness in US dollar. WTI Crude oil futures had slipped amid thin trading today to test levels near $85 per barrel as Sandy, one of the biggest storms ever to hit the United States, shut East Coast refineries, roads and airports, reducing crude and fuel products demand in US. The WTI futures, however, recovered from these levels and soared in European trades as British Petroleum (BP), Europe's second-biggest oil company, raised its dividend as third-quarter profit beat analysts' estimates. The commodity quotes at $85.99, up 45 cents per barrel on the day.
However, the economic data in Europe was grim. German jobless rate increased for the first time in three years as the sovereign debt crisis damped economic growth and investment. The number of people out of work climbed a seasonally adjusted 20,000 from September to 2.94 million, the Federal Labor Agency in Nuremberg said today. The adjusted unemployment rate jumped from a two-decade low of 6.8%in August to a revised 6.9% in September and stood at the same level in October.
Earlier in the day, the Bank Of Japan (BOJ) increased the size of its asset purchase program by JPY11 trillion at today's policy meeting, amid concerns over the deteriorating economic outlook and growing political pressure to step up measures to combat deflation. In a joint statement with the central bank, Economics Minister Seiji Maehara said the new measures were an important step towards defeating deflation. However, these measures were a little less than what the markets were expecting after last week's announcement of a stimulus package by the government-fueled expectations of even more aggressive steps.
Spain's economy contracted for a fifth quarter, notwithstanding efforts to plug the budget deficit that's pushing the nation closer to a bailout, while austerity measures kept inflation at a 17-month high. Gross domestic product dropped 0.3% in the three months through September and 1.6% from a year earlier, the National Statistics Institute said today.
BP noted that refining margins improved in the third quarter. BP's refining marker margin, a generic measure of global profitability, rose to $19.50 a barrel in the period from $15.84 in the three months through June. It also said that third-quarter production, excluding the Russian TNK-BP venture, dropped 3% to 2.26 million barrels of oil equivalent a day.
The activity in the world markets is rather thin as the major US markets were closed overnight and will remain closed tonight as the US east coast deals with the impact of superstorm Sandy. The gains in WTI futures in electronic moves led to a steady pickup in local futures as well and the MCX November contract gained from a low of Rs 4625 per barrel. The counter quotes at Rs 4673 per barrel right now, up Rs 25 per barrel on the day.
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