Oversupply fears takes Oil down

Against the backdrop of exacerbating fears over a global supply glut amid the recently concluded Iran nuclear accord and record high US stockpiles and a surge in Saudi production, Oil traders punished the energy commodity, which tanked more than 1.7 per cent on Wednesday.Despite a 4.3 million barrels drop in US crude oil stockpiles in the week ended July 10, 2015, total storage at 461.4 million barrels remained at levels unseen at this time of the year in at least the past 80 years. Moreover, supplies at Cushing, the biggest US oil storage hub, climbed by 438,000 barrels last week.Meanwhile, investors weighed the Iran nuclear deal with the West earlier in the week which will pave the way for lifting of sanctions against the Islamic nation, allowing it to probably double its crude oil shipments.With production of Saudi Arabia already at record high, US inventories piling up, and millions of barrels of Iranian crude threatening to hit the market, bears have stung the energy commodity.Meanwhile, American factory output was little changed in June and overall industrial output climbed 0.3 per cent while the Fed’s Beige Book survey showed that the world’s biggest economy expanded at a moderate to modest pace in recent weeks, offering a mixed demand outlook for oil.Crude oil may rebound today as sharp losses in recent sessions may pave the way for value buying in the energy commodity.At the MCX, Crude oil futures, for the July 2015 contract, closed at Rs 3,288 per barrel, down by 1.76 per cent, after opening at Rs 3,376, against the previous close price of Rs 3,347. It touched an intraday low of Rs 3,272. 

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