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Oil Price Trend Update

We published an article, What Is Keeping The Oil Prices Low?  in February that highlighted the reasons behind the current downturn in crude oil prices and its impact. The following is an update on that material.
The June WTI is trading close to $48.35, while the July Brent is at $49.11, implying an improvement by about 49% from our last post. At any point in time, there is a complex dynamics behind crude oil trends that combines the impact of long and short-term factors.

The Supply Side
OPEC has released its May 2016 report and has predicted non-OPEC oil production to come down by 0.74 million barrels per day (mb/d) this year. The OPEC think-tank is exploiting its dominant market position and financial bandwidth to wait out its rivals.

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How is Oil Price Really Determined?

Throughout the history, oil prices have had a roller-coaster ride and the trends do not make sense all the time. The current downturn has once again brought into focus the complex dynamics behind this crucial commodity.
This article covers the very starting point in this story – the determinants of
oil price. The rate of crude oil is impacted by the demand-supply dynamics, but contrary to popular belief, it is primarily set by the derivatives market.


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What Is Keeping The Oil Prices Low?

While the last two years altogether have been a volatile period for oil prices globally, they have been in a free fall since the last quarter of 2015. Benchmark Brent closed at $33.10, while WTI closed at $32.30 on last Wednesday, January 27. The prices have fallen by about 70% from June 2014 peak prices. [May 2016 Update: July Brent is trading at $49.35, while June WTI is at $48.30. Read our update synopsis] Interestingly though, the supply side players do not appear to be relenting anytime sooner. In fact, analysts expect that the production is going to increase in near term, pushing the prices down even further. So, what is really going on with the oil industry?

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CNG Cylinders Market Summary

The outlook for high-pressure CNG cylinders market in India is positive. With Government initiatives for facilitating the discovery & exploration of natural gas, growth of robust distribution channels, fiscal benefits to the manufacturers of cylinders, retrofitting of CNG kits, tax exemption for commercial & heavy vehicles and new licensing policy, the industry is likely to register impressive growth over the coming years.

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