Petrol and Diesel Price Today, 9 Sep 2022: Fuel cost steady; Check rates in Delhi, Mumbai, Noida, other cities

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Petrol and Diesel Rate Today in Delhi, Bangalore, Chennai, Mumbai, Lucknow: The price of petrol and diesel has been kept steady on 9 September 2022, keeping costs steady for more than three months now. Petrol and diesel in Delhi cost Rs 96.72 and Rs 89.62 a litre, respectively. In Mumbai, petrol is retailing at Rs 106.31 per litre and diesel at Rs 94.27 per litre. The last country-wide change in price came on 21 May 2022, when Finance Minister Nirmala Sitharaman announced a cut in excise duty on petrol by Rs 8 per litre, and Rs 6 per litre on diesel. Since then, Maharashtra is the only state to have cut rates. The Maharashtra government had announced a cut in value-added tax (VAT) on petrol by Rs 5 a litre and by Rs 3 a litre for diesel in July.

Also read: Nifty short-term trend positive, may move to 18000 once 17800 breached; 5 things to know before opening bell

Petrol, diesel prices in Chennai, Kolkata, Bengaluru, Lucknow, Noida, Gurugram

Mumbai: Petrol price: Rs 106.31 per litre, Diesel price: 94.27 per litre

Delhi: Petrol price: Rs 96.72 per litre, Diesel price: Rs 89.62 per litre

Chennai: Petrol price: Rs 102.63 per litre, Diesel price: Rs 94.24 per litre

Kolkata: Petrol price: Rs 106.03 per litre, Diesel price: Rs 92.76 per litre

Bengaluru: Petrol: Rs 101.94 per litre, Diesel: Rs 87.89 per litre

Lucknow: Petrol: Rs 96.57 per litre, Diesel: Rs 89.76 per litre

Noida: Petrol: Rs 96.79 per litre, Diesel: Rs 89.96 per litre

Gurugram: Petrol: Rs 97.18 per litre, Diesel: Rs 90.05 per litre

Chandigarh: Petrol: Rs 96.20 per litre, Diesel: Rs 84.26 per litre

Also read: IndiGo, Vodafone Idea, Jet Airways, Future Lifestyle, Adani Group stocks in focus on September 9, 2022

Public sector OMCs including Bharat Petroleum Corporation Ltd (BPCL), Indian Oil Corporation Ltd (IOCL) and Hindustan Petroleum Corporation Ltd (HPCL) revise the fuel prices daily in line with international benchmark prices and foreign exchange rates. Any changes in petrol and diesel prices are implemented from 6 am every day. Retail petrol and diesel prices differ from state to state because of local taxes like VAT or freight charges.

Rupee to depreciate on strong dollar; falling crude prices may cap downside, USDINR to trade in this range

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By Raj Deepak Singh

Rupee depreciated this week to a new all-time low and touched 81.2750 level amid sharp rise in US dollar index. Further, rupee was pressurised by weakness in domestic equity markets and fresh FIIs outflows. Dollar index surged by almost 2% to a fresh two-decade high this week after the Federal Reserve raised interest rates by another 75 basis points as expected and signalled larger increases at its upcoming meetings. Further, steep rise in US 10 years’ treasury yields supported US dollar. Moreover, continued better macro-economic data from the US supported dollar. The number of Americans filing new claims for unemployment benefits rose to 213,000, below market expectations of 218,000.

We expect the US dollar to appreciate further in the coming week and surpass new two-decade highs of 111.82 to touch 113 level amid expectations of a further aggressive interest rate hike from the US Fed in the coming meetings. Euro gained some support as the German government said they will provide urgent financial support to regional state-owned energy providers, which are struggling to cope with soaring gas prices. Weakness in crude oil prices should provide a cushion to rupee post sharp fall towards 81 levels. Moreover, Investors will keep an eye on interest rate decision from RBI and major economic data from the US like CB consumer confidence and GDP data.

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Reserve Bank of India is also expected to rise interest rate from 5.40% to 5.90%. which will eventually help Indian bond yield to rise further. USDINR traded largely in a triangle pattern where it traded towards the support level at 79.20 and then rebounded back towards the resistance level of 81.00. The pair is expected to continue trading in upward trend towards the level of 81.30 after breaking the resistance level of 81.00. However, upsides seem capped for time being as there are some supportive factor for INR whereas rise in Dollar index should limit gains so we expect a consolidation in INR.

Also Read: How do new internet IPO companies fare when it comes to valuation and profitability?

(Raj Deepak Singh is an Analyst – F&O, Currency, and Commodities at ICICIdirect. The views expressed are the author’s own. Please consult your financial advisor before investing)

Rupee may appreciate on soft dollar, rising risk tolerance in equity markets; USDINR to trade in this range

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The Indian Rupee is likely to appreciate on Tuesday amid softness in dollar index, rise in risk tolerance in equity markets, sustained FII inflows. USDINR spot price likely to trade in a range of Rs 79 to Rs 80.30 in next couple of sessions. In the previous session, rupee pared its initial losses to settle higher against the US dollar, tracking positive domestic equities and foreign fund inflows. At the interbank forex market, the local unit opened at 79.66 against the greenback, and ended at 79.55, up 2 paise from its previous close. Rupee has shown more resilience than most of the other currencies in recent years and the compounded average growth rate of depreciation is lower as compared to pre-2014, said commerce and industry minister Piyush Goyal on Monday.

Also Read: Share Market LIVE: Nifty, Sensex likely to open higher, hints SGX Nifty; CPI inflation spikes to 7% in Aug

Anindya Banerjee, VP, Currency Derivatives & Interest Rate Derivatives at Kotak Securities

“USDINR spot closed 6 paise lower at 79.52, due to softness in the US Dollar Index and FPI flows. USDINR has been rangebound between 79.20 and 80.10 for the past 6 weeks. We could see the range continue for this week as well.”

Anuj Choudhary – Research Analyst at Sharekhan by BNP Paribas

“Indian rupee appreciated by 0.10% on Monday amid weak US Dollar and positive domestic equities. Dollar breached the 108-mark and is trading about 1% lower decline in safe haven appeal on the back of improved global risk sentiments. Euro also surged by 1.3% on reports that Ukraine has retaken some towns and cities in the Kharkiv region which is a setback for Russia. Rupee also gained on FII inflows. We expect Rupee to with a positive tone as rise in risk appetite in global markets and a weak Dollar may support Rupee. Sustained FII inflows may also favor the Rupee. However, worries over global economic slowdown and recovery in crude oil prices may restrict sharp upside. USDINR spot price is expected to trade in a range of Rs 79 to Rs 80.30 in next couple of sessions.”

Also Read: Will bulls push Nifty 50 to reclaim 18000? 5 key things to know before share market opening bell

Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services

“Rupee rose marginally as the dollar was weighed down against major crosses and also as market participants remained cautious ahead of the important inflation and IIP number that will be released on yesterday. Data showed inflation accelerated to 7% in August, driven by a surge in food prices, putting more pressure on the central bank to hike interest rates again later this month.Food inflation, rose 7.62% year on year in August, compared to a revised 6.69% in July. On the other hand, India’s annual industrial output in July rose 2.4% year-on-year, compared with the revised 12.7% growth in the previous month.”

“The dollar fell to its lowest level in more than two weeks against its basket of currencies following recent strong gains, as investors grew nervous ahead of U.S. inflation data. The New York Fed’s monthly consumer expectations survey showed that U.S. consumers’ inflation expectations slid further in August as gasoline prices extended their steep decline from June’s record high.Euro surged as policymakers at the ECB see increasing risks that the central bank will need to hike its key interest rate to 2% or more to curb record inflation in the euro zone. Today, market participants will be keeping an eye on the German economic sentiment to gauge a view for the currency. We expect the USDINR(Spot) to trade sideways and quote in the range of 79.20 and 79.80.”

(The recommendations in this story are by the respective research analysts and brokerage firms. FinancialExpress.com does not bear any responsibility for their investment advice. Capital markets investments are subject to rules and regulations. Please consult your investment advisor before investing.)

Nifty may hit 15,400 in medium term; BFSI, infra sectors, HDFC, RIL, Titan stocks look strong on charts

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By Dharmesh Shah

Equity benchmarks snapped the past two weeks’ winning streak amid volatile global cues. The Nifty concluded the week on a subdued note at 14678, down 1%. The Nifty midcap lost 0.7% while small-cap gained 0.3%. Sectorally, pharma, FMCG and PSE outshone while metal, IT underwent profit-booking.

The Nifty midcap and small cap indices displayed inherent strength and scaled to fresh 52-weeks high despite minor profit booking in the benchmark

– Structurally, we do not expect the index to breach the key support threshold of 14200. Despite elevated volatility owing to concern over second Covid-19 wave, it has managed to hold the key support of 14200 and formed a higher base. Hence 14200 would continue to act as a key support as it is confluence of:a) 100 days EMA placed at 14300b) last month’s low placed at 14151

Bank Nifty outlook

– The Index snapped two weeks up move and closed the week down by more than 2%. The weekly price action formed a bear candle which mostly remained within previous week high-low range signalling consolidation and lack of follow through to previous two weeks up move– Going ahead, we expect the index to continue with its last two weeks consolidation with positive bias in the broad range of 31500-33300. The lack of faster retracement on either side signifies extended consolidation that would help the index to form a higher base.– The index has immediate support at 32000-31500 levels being the confluence of the last two weeks low and the 61.8% retracement of the previous up move (30405-34287).– The index has maintained the rhythm of not correcting more than 20% as witnessed since March 2020. In the current scenario, it rebounded after correcting 19% from the all-time high (37708). Hence it provides favourable risk-reward setup for the next leg of up move

Structurally, we do not expect the index to breach the key support threshold of 30000-30500

– Structurally, we do not expect the index to breach the key support threshold of 30000-30500. Despite elevated volatility owing to concern over second Covid-19 wave, it has managed to hold the key support of 30500 and formed a higher base. Hence 30500-30000 would continue to act as a key support as it is confluence of:a. 200 days EMA placed at 30259b. last month’s low placed at 30405c. Price equality with the two major decline in the last 14 months from the all-time high (37708) also highlights major support around 30000 levels– Among the oscillators, the weekly stochastic remains in uptrend and is seen oscillating around the neutral reading of 50 indicating consolidation with positive bias in the coming weeks

(Dharmesh Shah is the Head – Technical at ICICI Direct. Please consult your financial advisor before investing.)

ICICI Securities Limited is a SEBI registered Research Analyst having registration no. INH000000990. It is confirmed that the Research Analyst or his relatives or I-Sec do not have actual/beneficial ownership of 1% or more securities of the subject company, at the end of 22/04/2021 or have no other financial interest and do not have any material conflict of interest. I-Sec or its associates might have received any compensation towards merchant banking/ broking services from the subject companies mentioned as clients in preceding 12 months

Gold Price Today, 27 Sep 2022: Gold prices recover from Monday’s lows, rates may remain under pressure

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Gold Price Today, Gold Price Outlook, Gold Price Forecast: Gold rate and silver rate were trading flat in India on Tuesday on pullback in dollar. On Multi Commodity Exchange, gold October futures were ruling Rs 50 or 0.10 per cent down at Rs 49100 per 10 gram as against the previous close of Rs 49150. Silver December futures were up Rs 48 at Rs 55400 per kg. Globally, yellow metal prices rose as the dollar’s rally paused, but prices held close to a 2-1/2-year low on expectations of further policy tightening by the US Federal Reserve in its efforts to quell soaring inflation, according to Reuters. Spot gold gained 0.6% at $1,631.89 per ounce. Prices hit their lowest level since April 2020 at $1,620.20 on Monday. U.S. gold futures rose 0.3% to $1,638.1.

Also read: Petrol, Diesel Price Today, 27 Sep 2022: Fuel cost static; check rates in Delhi, Mumbai, Noida, other cities

Gold price continues to trade around 2.5 year low on rising government bond yields and strong US Dollar. Traders are ramping up short positions on gold, with fund managers more bearish on the metal than any other time over the past four years. Gold has outperformed other asset classes as although the gold market has seen some significant selling pressure, dropping briefly to fresh two-year lows at $1,630 an ounce, prices are still only down less than 10% since the start of the year. Looking at how the US dollar and yields are faring, gold should be down by 30%. Growing recession risks as central banks continue to tighten monetary policy worldwide should also provide some support for the yellow metal. Intraday support is at 48800 while resistance is at 49600. Expect prices to remain under pressure today.

Navneet Damani, Sr. Vice President – Commodity & Currency Research, Motilal Oswal Financial Services

Gold prices were steady after a fall in yesterday’s session amidst sharp upside in U.S. Dollar Index and Yield on expectations of further policy tightening by the U.S. Federal Reserve in its efforts to quell soaring inflation. Dollar Index continue to hover around its 20year highs; while anticipation of further rate hikes is supporting the move in U.S. Yields, U.S. 10Y yield hit their highs last seen in 2010. Fed officials sloughed off rising volatility in global markets, from slumping U.S. stocks to currency turbulence abroad, and said their priority remained controlling domestic inflation. Global economic growth is slowing more than it was forecast a few months ago in the wake of Russia’s invasion of Ukraine, as energy and inflation crises risk snowballing into recessions in major economies, the OECD said. China’s net gold imports via Hong Kong jumped nearly 40% to an over four-year high in August, as demand continued to rebound in the world’s biggest consumer of the metal. While outflow in SPDR holdings continues to hurt the market sentiment. Along with speeches from the Fed and ECB Governor, focus today will also be on the U.S. Consumer confidence and Core durables goods orders data. Broader trend on COMEX could be in the range of $1615-1660 and on domestic front prices could hover in the range of Rs 49,375-49550.

Also read: Rupee likely to depreciate further on strong dollar, weak Asian peers; may slip to 82 per USD 

Abhishek Chauhan, VP – Commodity & Currency, Mandot Securities

Prices of gold and silver recovered, as pressure from the dollar appeared to have eased, creating the demand for safe haven Gold which moves slightly higher. The DX retreated slightly after scaling a new 20-year high on Monday  near to 115 levels. A selloff in most other asset classes and rising interest rates globally boosted the greenback’s safe haven demand, helping the currency largely overtake gold as a preferred safe haven buy this year. In Comex, gold has support at $1610-1620, while resistance is at $1645-1655.Silver has support at $18.00-18.20, while resistance is at $19.00-19.15. In rupee terms at MCX  gold has support at Rs 48930-49000, while resistance is at Rs 49500-49650. Silver has support at Rs 55200-55000, while resistance is at Rs 56800–57000.

(The views in this story are expressed by the respective experts of the research and brokerage firm. Financial Express Online does not bear any responsibility for their advice. Please consult your investment advisor before investing.)

Nafed sells chana below MSP to liquidate surplus stocks

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Saddled with 3 million tonne (mt) of stocks procured mostly in the last two years, the government has started to sell chana (gram) below the minimum support price (MSP) from the buffer held with the National Agricultural Cooperative Marketing Federation of India (Nafed).

Sources told FE that farmer cooperative Nafed has sold chana through open auction at the price ranging between Rs 4,416-4,751/quintal in Rajasthan, Karnataka, Andhra Pradesh and Madhya Pradesh in the last few weeks to bulk buyers. The price realised through open auction by Nafed was against the MSP of Rs 5,230/quintal and Rs 5,100/quintal for the 2021-22 and 2022-23 seasons paid to farmers.

Currently, mandi prices of chana are ruling at Rs 4,300-4,600/quintal and traders say that the government move to sell surplus pulses below MSP will put further pressure on chana prices. Chana price declined by 1.28% in August compared to a year ago.

To dispose of surplus stock, on August 31, the Cabinet had approved the disposal of 1.5 mt of chana from the surplus buffer stock held with Nafed, at a discount of `8 per kg over the issue price, to states for supplying through various social sector schemes.

Sources said that several states such as Karnataka, Gujarat, Himachal Pradesh and Tamil Nadu have envisaged buying pulses at the discounted prices from the government stock.

Also Read: Govt to soon announce sugar export quota for 2022-23 market year: Food Secretary 

The government’s expenses are expected to be around Rs 1,200 crore for implementation of this scheme.

Prior to the beginning of the next chana harvest season in April 2023, officials said that the government aims to create storage facilities.

At present, against the government’s buffer stock norm of 2.3 mt, Nafed has 3.7 mt of pulses. Of this, the chana stock is close to 3 mt. A portion of the stock is close to two years old.

However, in the case of other varieties of pulses, because of lower procurement, the government’s stocks are smaller — moong (0.56 mt), urad (0.08 mt), tur (0.12 mt) and masoor (0.07 mt) — at present.

Due to a record chana production of 13.75 mt in the 2021-22 crop year (July-June), Nafed procured more than 2.5 mt of pulses in the 2022-23 (April-June) season under the price support scheme (PSS), aimed at providing MSP to farmers.

Chana has a share of close to 50% in the country’s production of 27.69 mt in the 2021-22 crop year.

Stating that there is paucity of systematic clearance of pulses procured by Nafed under the PSS, the Commission for Agricultural Costs and Prices (CACP), in its price policy for rabi crops marketing season (2022-23), had stated that “they are found often offloaded in the market at discounted price and this leads to sharp decline in market prices while dampening the prospect for private procurement directly from the farmers”. The CACP has recommended fixing of a reserve price which is linked to MSP for disposal of stocks similar to wheat and rice under the open market sale scheme, carried out by Food Corporation of India.

Focus on IT, Pharma, FMCG, and select PSU stocks; commodity bull run entering last leg now | INTERVIEW

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The second wave of the coronavirus pandemic might not result in significant correction for Sensex and Nifty unless it lasts for a couple of months, said Amit Jain, Co-Founder and CEO, Ashika Wealth Advisors in an interview with Kshitij Bhargava of Financial Express Online. Amit Jain, the market experts with nearly two decades of experience, believes IT, Pharma, and FMCG are some of the sectors where investors could focus on, expecting robust bottom-line numbers. Further, Jan believes that in the post-pandemic world India could become the manufacturing hub for the world. Here are the edited excerpts.

Q Stock markets are down from their all-time highs now, where are you spotting opportunities in this market?

Q Commodity cycle is the buzzword on Dalal Street, are you buying this argument that commodity stocks are entering a massive-bull run?

Almost six months back, we advised entry in commodity stocks and since then the NIFTY metal index is up almost 70% and individual stocks are up almost by 200%. In my view, this is the last leg of the bull run in commodities due to excessive money printing by the US Fed, which may last for another six to nine months. In my personal view, it is time to lighten the position in commodities in the short term.

Q India is witnessing the second wave of covid-19 cases. Although the vaccination drive is expected to pick up pace now, what implications, if any, do you see for stock markets if the second wave stretches longer?

Yes, You are right, the second wave is there, but in my view, it may be less fatal compared to the first wave, as now the world knows about the virus and is partially prepared to face it, unlike the first wave. If this wave stretches for a couple of months, then the market may have an excuse for a further significant correction. 

Q India has undertaken serious reforms during the last year and the economic outlook seems strong; what sectors do you believe are the best bet on India’s growth story ahead?

Yes, India took appropriate steps to boost the Economy during the Covid-19 pandemic, which has laid the foundation for a much stronger Indian Economy by 2030. In the post-Covid-19 era when the world is talking about “Social distancing” from China, all those sectors will be beneficiary in India where currently China dominates the World. In my view “India” may be the new manufacturing hub of the World by 2030, if the current pace of reforms continues. Indian may be a leading IT and Pharma exporter for the World Economy by 2035. The world has no alternative to India, as this is the only economy in the world that has both democratic and demographic dividend for the next fifteen years. This duo combination is rare in the world, hence the entire World Capital whether it is FDI or FPI, will chase India. Recently India has touched a new benchmark of $500 billion cumulative FDI investment, which reflects the commitment of Global Capital to India.

Q Bond yields are rising, does any further rise in yields pose a threat to FPIs pulling money away from the domestic market in large quantities?

Yes, US bonds yield has risen due to inflation fear from 0.51% in August 2020 to 1.71 % as on date which is 300% higher than August 2020 lows, however, it is still lower than 2.2% which it touched in the Dec 2008 post-Lehman Brother crash. In my view in the short term,  it may go back to 2.1%, however, in the long term, it will hover around 1.2 % to 1.8%. If this yield crosses 2% sustainably in the medium term, only then we have fear of FPI pulling out significantly from Indian Markets.

(The stock recommendations in this story are by the respective research and brokerage firms. Financial Express Online does not bear any responsibility for their investment advice. Please consult your investment advisor before investing.)

Investing in 20s: This investment tool may help you pocket 12% profit, beat hot inflation

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By Deepak Singh

Every investor has a dream to grow their wealth consistently over the long term. While some succeed in their efforts, others end up either losing money or making small gains despite the overall market posting handsome gains. Have you ever thought about what successful investors do? They use their intelligence and start investing at an early age and distribute the available investable fund smartly in a way that could yield profits. However, other sets of investors make decisions based on market grapevine and rumours. Most of the time, such trades result in a loss for the new investor and only the operators make money.

There is no benchmark yardstick in which you diligently get returns but if you start investing at an early age and diversify your portfolio among varied asset classes like equity, debt, and commodities, fixed income instruments like bank deposits then you are bound to make good returns over time. It is very important to start investing early and the thumb rule to invest is to have 100 minus your age in equity and the remaining investable amount in other assets like debt, real estate and gold ETF which can lead to your portfolio at around a CAGR of 11-12%

Most people at the age of 25 years enter the earning sphere either through a job or ancestral businesses, immediately after completing higher education. Hence, they remain mostly unaware of investment tricks. Around this age, a financial advisor approaches you with an assured return offer which sometimes works but often fails. This is where investors start losing money and building a negative perception about the equity market and prefer to move to an option with fixed income like bank deposits and life insurance policies. New investors get into the trap of ‘high returns in the short term’ and the worst part of this impression is that such investors change their decisions within a few initial months of investing which ideally should not happen, you should trust the process of investing.

Investors need to spend some time in the equity market to understand profit-making gimmicks and then make a decision. This will allow you to choose stocks and sectors which may yield you better returns and help you in wealth creation. A Systematic Investment Plan (SIP) is a better instrument for entry-level investors who can carve out a portion of their salary and pump in every month. Over a long-period horizon – say after 20 years- the SIP investment yields profit between 11-12%. Even if the stock market moves in a downward direction, the recovery will certainly help beat even extremely high inflation with a wide margin.

Also read: Gold prices to remain under pressure till US Fed; trend looks bearish, support seen at Rs 48800

Fund managers distribute your SIP amount in a number of specific stocks and sectors. They also pick up some commodities and fixed income asset classes from the SIP amount so that even if one stock or sector sinks, profits from sectors would square off this loss and eventually give you a good return. Normally, equity investment decisions are taken by your investment advisors whether to go directly into primary or secondary markets or choose a sector with high returns potential. Options are also available for investors to take decisions directly and invest in emerging sectors or individual stocks for better profit. It is immaterial who takes the decision, but your active involvement and continuous watch on your investment would help you in wealth creation over a period of time.

(Deepak Singh is the Chief Business Officer at Reliance Securities. The views expressed in the article are of the author and do not reflect the official position or policy of FinancialExpress.com.)

Govt to soon announce sugar export quota for 2022-23 market year: Food Secretary 

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The government will soon announce export quota of sugar for next marketing year starting October, Food Secretary Sudhanshu Pandey said on Monday. He however did not disclose the quantity of sugar that will be allowed for export in 2022-23 marketing year.

“We will soon announce the sugar export policy for next season,” Pandey told reporters here on the sidelines of 82th AGM of Roller Flour Millers Federation of India (RFMFI). In May, the government had allowed exports of 100 lakh tonne of sugar, but later allowed another 12 lakh tonne. This took the total export quota for 2021-22 marketing year to 112 lakh tonne.

Also read| Sugar export volume to drop by quarter on low stocks

“We would like to request the government to allow 80 lakh tonne of exports for 2022-23 SS (Sugar Season),” the ISMA president had said in the letter. As per preliminary estimate, Jhunjhunwala said the net sugar production, without considering the diversion of sugar for production of ethanol, is expected to increase to about 400 lakh tonne in 2022-23 from 394 lakh tonne in current marketing year. However, he said 45 lakh tonne of sugar are expected to get diverted for ethanol in 2022-23 as against 34 lakh tonne in current marketing year. This means that actual sugar production in 2022-23 would be 355 lakh tonne, the ISMA president said.

Also read| Govt relaxes sugar export quota for 2021-22; allows additional 1.2 mn tonne shipments

“Therefore, after considering domestic sugar consumption of 275 lakh tonne in the next season (2022-23), it becomes imperative to export at least 80 lakh tonne of surplus sugar out of the country in order to maintain optimum sugar balance in the country,” Jhunjhunwala said. Exports of surplus sugar would also help in maintaining domestic sugar prices, which in turn will boost liquidity position of mills, enabling them to pay sugarcane farmers on time.

The ISMA president mentioned that the sugarcane crushing operations in 2022-23 is expected to start from October first week itself because of huge cane availability. Jhunjhunwala urged the government to announce the export policy for 2022-23 at the earliest so that mills can enter into future contracts and also plan their production in advance.

OPEC+ cuts ahead of winter fan global inflation concerns

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Concerns over tight oil supplies and soaring inflation have intensified after the OPEC+ group of nations announced its largest supply cut since 2020 ahead of European Union embargoes on Russian energy. The move has widened a diplomatic rift between the Saudi-backed bloc and Western nations, which worry higher energy prices will hurt the fragile global economy and hinder efforts to deprive Moscow of oil revenue following Russia’s invasion of Ukraine.

Global crude futures jumped this week, returning to three-week highs, after the Organization of the Petroleum Exporting Countries and their allies, including Russia, agreed to slash output by 2 million barrels per day just ahead of peak winter season. This is likely to drive spot prices higher, particularly for Middle East oil, which meets about two-third of Asia’s demand, industry participants said, adding to inflation concerns as governments from Japan to India fight rising cost of living while Europe is expected to burn more oil to replace Russian gas this winter.

“We are concerned about a resurgence in international oil prices, which have shown some signs of calming down since the second quarter,” a spokesperson at South Korea’s largest refiner SK Energy told Reuters. Another South Korean refining source said the supply cut could drive prices back to levels seen in the second quarter. South Korea, Asia’s fourth-largest economy and a manufacturing powerhouse, has seen costs skyrocket due to the surging commodity prices. Brent hit $139.13 a barrel in March, the highest since 2008, after the Ukraine war sparked fears of Russian oil supply loss.

ACTUAL CUTS

Saudi Energy Minister Abdulaziz bin Salman said the real supply cut would be about 1 million to 1.1 million bpd, a response to rising global interest rates and a weakening world economy. That move triggered a sharp response from Washington, which criticised the OPEC+ deal as shortsighted. The White House said President Joe Biden would continue to assess whether to release further strategic oil stocks to lower prices.

Also read| Explainer: What is NOPEC, the US bill to pressure the OPEC+ oil group?

“Saudi, UAE (the United Arab Emirates) and Kuwait are likely to take up most of the burden of cuts,” said Tilak Doshi, managing director of Doshi Consulting, who was previously with Saudi Aramco. “It’s a slap on Biden’s face by OPEC+,” he said, adding that ties between Russia and Saudi seem increasingly tight. While the SK Energy spokesperson expects U.S. reserves release to accelerate ahead of the U.S. midterm elections in November, RBC Capital analysts said follow-on sales would likely be more incremental. “We are unlikely to see another blockbuster release in the near term,” the bank added.

The OPEC+ cuts compound supply concerns as European Union sanctions on Russian crude and oil products take effect in December and February, respectively.Industry participants estimate the loss of Russian crude at between 1 and 2 million bpd, depending on how Moscow reacts to the G7’s price cap on Russian oil. That policy is aimed at ensuring Russian oil continues flowing to emerging economies but at lower prices to reduce Moscow’s revenues.

“The market is still underpricing the actual loss,” said a Singapore-based crude oil trader who declined to be named due to company policy. The move by OPEC+ prompted warnings from oil importing emerging markets, some of which have become particularly vulnerable to price shocks amid recent global supply snags. Sri Lanka is battling its worst economic crisis since independence from Britain in 1948, with a plunge in its currency, runaway inflation and an acute dollar shortage to pay for essential imports of food, fuel and medicine.

President Ranil Wickremesinghe warned Sri Lanka will have to pay even more for fuel as richer countries stock up for their own needs. “This is not just an issue faced by us but several other South Asian countries,” he told parliament on Thursday. “Global inflation is going to hit us all next year.”