MCX Crude Slips In Negative Zone

MCX Crude oil futures slipped into red in afternoon, sliding from highs near Rs 5200 on selling pressure in global prices. The WTI crude had rallied to a three and half-month highs on Friday but dropped in New York floor trades on weak economic data releases from US and profit selling ahead of weekends. The commodity quotes at $95.74, down 30 cents per barrel on the day.

Prices dropped near $95 on Friday after the Thomson Reuters/University of Michigan initial index of consumer sentiment for January dropped to 71.3 from 72.9. The initial January reading is the lowest since December 2011. Eurozone economic growth worries also resurfaced as Italy stated that its economy will likely contract by 1% in the current year.

Chinese economic growth levels will remain about the same in 2013 but inflation is likely to rebound moderately, according to economists at the government's leading think tank. GDP growth will stay at 2012 levels, about 7.8%, and the Consumer Price Index, a main gauge of inflation, may go up from 2.6% in 2012 to 4%, said Yu Bin, the director of macroeconomic research at the State Council Development Research Center, according to media reports today.

Oil remains supported on weakening Middle East output and could witness some bargain hunting in case prices drop further. The MCX Crude oil futures for February, the just turned benchmark futures are quoting at Rs 5154, down Rs 5 per barrel on the day with a 16% increase in open interest. Prices had bounced towards Rs 5175 per barrel but failed to hold onto the intraday rallies given the persistent pressure to sell in world markets.

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