The MCX Crude oil futures are trading lower in the first couple of hours of trade today as the sell off in global prices led to a flurry of short selling in the local markets. The global economic worries continued to rule the roost last week though the Chinese economic data over the weekend augured well for the general risk appetite. The sentiments are cautious ahead of key economic data in US this week and the earnings season is also taking center stage. US dollar witnessed a spirited rally today, pulling WTI Crude lower. The benchmark WTI futures are quoting at $91.08, down 78 cents per barrel on the day. Yet over the weekend, a rebound was witnessed in China's exports. The exports in September recorded a jump of 9.9% year-on-year growth, in turning triggering a $27.7 billion monthly trade surplus. This wiped out the worries generated in the middle of the year amid waning exports growth. The country's had grown by just 2.7% in August. Oil had recovered from lows near $88 per barrel last week on Middle East worries and a drop in OPEC production even as the International Energy Agency (IEA) cut its oil demand forecast. OPEC production fell 510,000 barrels a day to 31.17 million last month as Iranian sanctions reduced exports pressuring oil higher. The International Energy Agency (IEA) cut oil demand growth forecast for the current year yet again amid weak economic scenario around the world. In its monthly oil market report the IEA revised its expectations of global oil demand growth to 700,000 barrels a day this year. However, the agency kept its 2013 demand growth forecast unchanged at 800,000 barrels a day. The sluggish oil demand was met last month by a decline in supply from the Organization of Petroleum Exporting Countries, which fell to an eight-month low in September, the IEA said.In a key development over the weekend, the US Federal Reserve Chairman Ben Bernanke defended his central bank's extraordinary efforts to revive the US economy from international criticism, saying the Fed isn't responsible for artificially boosting rival currencies and that other nations should let market forces determine exchange rates anyway. Speaking before the International Monetary Fund meeting in Tokyo, Bernanke on Sunday refuted criticism that the Fed's asset purchases and low interest rates are mainly driving capital flows to emerging market economies. The Fed last month embarked on its third major bond-purchase program, this time buying $40 billion of mortgage-backed securities every month until unspecified improvement in the economy.US stocks witnessed worst week in four months, led lower on Friday by financial shares as results from Wells Fargo and JPMorgan ignited concerns about shrinking profit margins for big lenders. It will be interesting how the sentiments play themselves out this week. The WTI Crude fell right from the start today and seems to be hanging just above $91 per barrel right now. MCX Crude oil futures have been finding it difficult to hold on around Rs 4900 and the counter slipped yet again, after a modest rise in the shortened session on Saturday. The contract trades at Rs 4841, down Rs 21 per barrel on the day or 0.43%. The open interest zoomed up by nearly 7%, indicating heavy short selling.
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