OIL STARTS WEEK BELOW $107
Date: 26/3/2012
Crude oil futures started the week on weak note, trading below $107 a barrel after over $3 on Friday following reports that oil exports from Iran were reduced significantly this month, while broad dollar weakness also provided support.
According to the group, Iran's oil exports in March fell by 300,000 barrels a day, or 14% from a month earlier. The stand-off between Iran and Western countries has dominated sentiment in the oil market in recent months.
There are fears that the escalating rift over Tehran's nuclear program could lead to an oil-export halt, a disruption to shipping traffic in the Strait of Hormuz or military conflict, which could send oil prices skyrocketing. Iran produces about 3.5 million barrels of oil a day, making it the second-largest oil producer in the Organization of Petroleum Exporting Countries after Saudi Arabia.
NYMEX light sweet oil futures are trading down 23 cents at $106.64 per barrel. On Friday, the Brent prices jumped to as high as $126.88 in the minutes following the Iran oil export report, just $20 away from the all-time high hit in July 2008. French lender Societe Generale raised its price forecast for Brent this year to an average of $127 from $110, citing supply risks.
MCX April crude may start today's session below Rs 5488 levels with support near Rs 5470 and Rs 5440 levels.
In the week ahead, the U.S. is to release data on consumer confidence, pending homes sales, and factory output, all of which will be closely watched in order to gauge the strength of the U.S. economic recovery.
Meanwhile, oil traders will continue to monitor tensions between Iran and the West and a potential disruption to oil supplies from the region as well the possibility of the release of stockpiles from emergency reserves.
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