Oil Declines In Tandem With Equities

Oil........

Crude oil futures declined in the Asia electronic session today falling in tandem with the weakness in the Asian equities after Dow Jones Industrial Average sank more than 200 points on Friday.
Equities and crude oil have traded in tandem in recent weeks, on the belief share prices act as a proxy for economic sentiment and are a bellwether for oil demand.
Japanese shares tumbled as a firm yen prompted selling in exporters while, Chinese stocks rose modestly in choppy trade Monday as separate data from the government and HSBC painted a contrasting picture of manufacturing activity in the country.
The Shanghai Composite Index rose 0.4%, while Hong Kong’s Hang Seng Index also gained 0.4%, with both benchmarks overcoming early losses. The gains came after a Chinese government-sponsored survey on manufacturing activity in the country, released on Saturday, rose to 50.8 in May from 50.6 in April, indicating an improvement in business conditions at the nation’s factories.
Meanwhile, the Nikkei Stock Average tumbled 2.2% by the midday break in Tokyo. The losses came after Japanese stocks ended May with a mild loss following gains in each of the previous nine months. Japan’s hard fall Monday came after Dow Jones Industrial Average sank more than 200 points on Friday, and as U.S. dollar stayed under the 101-yen level in Asia on Monday.
Light sweet crude oil futures for July delivery is trading down 5 cents at $ 91.92 per barrel on the New York Mercantile Exchange. On Friday, it plunged 2.1% to settle the week at $91.65 a barrel. On the week, Nymex oil futures lost 2.35%, the second consecutive weekly decline.
On Friday, the Organization of the Petroleum Exporting Countries decided to leave global output quotas unchanged at 30 million barrels per day for the third consecutive meeting, as widely expected. Ministers from the 12-member group will next gather on December 4.
In the week ahead, investors will be awaiting the release of Friday’s closely watched report on U.S. nonfarm payrolls for further hints regarding the direction of U.S. monetary policy.
MCX June crude futures may open today’s session near Rs 5230 levels with support around Rs 5200-190 levels and resistance near Rs 5255 levels.
Source by Commodity Insights