Unexpected increase in US crude & product stocks weighed down markets
Oil prices were mixed in Asian trade today as sagging demand in the United States, the world’s largest energy-consuming nation, limited the market’s gains, analysts said, reports PTI.
New York’s main contract, light sweet crude for delivery in June, was up five cents to $83.75 a barrel. Brent North Sea crude for June fell two cents to $85.65.
The market was weighed down by a report on Wednesday from the US Department of Energy (DoE) which showed an unexpected increase in crude and product stocks, analysts said.
The rise indicates weaker demand as the world’s biggest economy struggles to recover from its worst economic downturn since the 1930s.
“It does put some doubt on the fact that the market won’t move back into balance,” said Ben Westmore, minerals and energy economist for the National Australia Bank in Melbourne.
“It’s arguable whether (oil above $80 a barrel) is really justified given the very weak fundamentals,” he added.
The DoE announced on Wednesday that US crude reserves increased 1.9 million barrels in the week ending 16th April. This was against market expectations of a drop of 200,000 barrels.
Gasoline or petrol stockpiles also soared 3.6 million barrels, exceeding forecasts of a small gain of 300,000 barrels.
Distillates, which include diesel and heating fuel, rose 2.1 million barrels whereas analysts had expected an increase of 900,000 barrels.
Exports to China touched $5.81 billion in the period between January and March this year as against $3.31 billion in the same period last year
Indian exports to China surged by 75% in the first quarter this year, with a big increase in textiles and stones & precious metals shipments, bringing down the trade deficit.
Overall trade with China grew by about 66% during the period, raising hopes of achieving the trade target of $60 billion this year, according to data released by the Chinese government today, reports PTI.
Indian exports—which declined radically last year and resulted in a $16 billion trade deficit—have shown significant improvement.
According to the trade data, Indian exports to China touched $5.81 billion in the period between January and March this year as against $3.31 billion last year when overall trade volumes declined to about $44 billion due to the global economic downturn. The increase was stated to be 75%.
However compared to 2008, during which trade volumes touched a record $52 billion, this year’s quarterly exports from India still fell short by $53 million. The overall trade between the two countries this quarter touched $14.14 billion against $13.24 billion in 2008 and $9.3 billion in 2009.
The new trade figures brought cheer to China too, as its exports to India went up by 38% compared to 2009.
Chinese exports in Q1 were also higher than the $6.9 billion figure for exports to India during the same period in 2008.
The trade deficit for India was $2.5 billion for the first quarter, slightly lower than the $2.7 billion figure in the first quarter of 2008.
The two countries had set $60 billion as the trade target this year and the first quarterly figures showed that they are on their way to reaching it, Indian officials said.
According to the new figures, cotton, yarn & fabric exports from India have gone up from $495 million in 2008 to $729 million in the first quarter. The exports in this sector fell to $81 million around the same period in 2009.
Similarly, Indian exports of copper have gone up from $124 million in 2008 ($425 million in 2009) to $264 million. Exports of precious stones and metals have gone up from $90 million in 2008 ($64 million in 2009) to $164 million.
In plastics too, Indian exports have done well, going up from $59 million in 2008 ($28 million in 2009) to $109 million in this year’s first quarter.
Reacting to the positive trend in Sino-Indian trade, the Indian Ambassador to China, S Jaishankar, told PTI, “I am encouraged by the first quarter figures, particularly the pick (up) in cotton, fabrics, copper products, jewellery, plastics and, to some extent, even machinery.”
China has already emerged as India’s biggest trade partner, while India remained Beijing’s ninth largest trade partner.
The IMF head has said that in advanced economies, unemployment is still very high and in some countries it is still rising, and the financial sector has still not been repaired
The International Monetary Fund (IMF) has said that the world is still a “dangerous place” and the recovery, though sooner than expected, is still fragile, reports PTI.
“The world is still a dangerous place and I would not like (to think) that too many people have in mind that the crisis is over, that everything is behind us, and that we can go back to business as usual,” IMF managing director Dominique Strauss-Kahn has said.
Mr Strauss-Kahn said that there are several challenges that need to be met.
“The first is that in a number of countries unemployment continues to rise and so we cannot in any way assume that the crisis is behind us. In some countries, not in all, and some advanced countries, unemployment continues to rise,” he said.
The second challenge, he said, was that the recovery, though certainly in place, is fragile within the G-7, and among the advanced countries in general.
“So long as private demand remains what it is, we know that public policy will have to remain vigilant,” he said.
Observing that the risks of future crises remain latent, he said there is also the question of public indebtedness.
“There is an economic slowdown,” the IMF chief said in response to a question.
He said that because of the stimulus, there has been more growth and that has led to less indebtedness than would otherwise have been the case.
“But that does not mean that we must not in any event continue to move toward more sustainable levels of indebtedness,” he said.
Mr Strauss-Kahn said that in advanced economies, unemployment is still very high and in some countries it is still rising, that private demand is still weak, and the financial sector is still not repaired.
“When we look at emerging countries, the main concern is about capital inflows because of the huge amount of liquidity available in the global economy, and the fact that there is some reluctance to invest in advanced economies—Europe, United States, even Japan—so huge capital is going into emerging countries, creating risks of asset price bubbles and different kinds of risks linked to this kind of capital inflows,” he said.