Crude oil prices ease after build in US crude stockpiles Oil prices eased on Wednesday, sliding from three-month highs hit the previous day after industry data showed an expected rise in U.S. crude stockpiles, but losses were capped amid signs of tighter global supply and hopes for China’s economic stimulus. Brent crude futures slid 32 cents, or 0.4%, to $83.32 a barrel by 0036 GMT. U.S. West Texas Intermediate (WTI) crude was at $79.35 a barrel, down 28 cents, or 0.4%. “An increase in U.S. crude inventories last week promoted some selling,” said Hiroyuki Kikukawa, president of NS Trading, a unit of Nissan Securities, adding that investors also squared their positions ahead of a monetary policy decision by the U.S. Federal Reserve. U.S. crude stocks rose by about 1.32 million barrels in the week ended July 21, according to market sources citing American Petroleum Institute figures on Tuesday. Analysts polled by Reuters expected a 2.3 million barrel drawdown. “The market will continue to be in a tug-of-war between tightening global supply and fears of slowing demand due to global economic slowdown, though we expect oil prices to test their upside during the summer driving season when demand is higher,” he said, predicting WTI would test mid-$80 levels in the July-August period. The Fed’s policy meeting started on Tuesday, with most market participants expecting the central bank to deliver a 25 basis-point rate hike when the meeting concludes on Wednesday. With crude supplies expected to tighten due to output cuts by the Organization of the Petroleum Exporting Countries (OPEC) and allies, oil prices have already clinched four weekly gains in a row. Saudi oil exports fell almost 40% in May from the same period a year ago, latest government data released on Tuesday showed.Meanwhile, leaders in China, the world’s No.2 oil consumer, pledged to step up economic policy support. On Tuesday, the International Monetary Fund raised its 2023 global growth estimates slightly given resilient economic activity in the first quarter, but warned that persistent challenges were dampening the medium-term outlook.
Retail inflation in milk was reported at 8.85% in May 2023. The milk inflation has remained elevated at over 6% since August 2022. Despite India being the largest milk producer since 1998, the commodity has been the second biggest factor after cereals such as rice and wheat in driving up retail inflation in the last fiscal.
Milk has the second highest weight in the food and beverages basket of the consumer price index at 6.61%, a notch lower than cereals and products with a 9.67% weight. Organised players, including Mother Dairy and Amul, hiked prices multiple times in the last one year citing higher fodder cost, robust demand and some impact due to reports of lumpy skin disease.
Industry sources said feed cost, which has a share of more than 65% in the cost of production of milk, has increased to Rs 20/kg from Rs 8 a year ago. The finance ministry in April had attributed the elevated milk inflation to a demand supply mismatch and said it could be one of the factors apart from volatile international crude oil prices and constrained supplies of milk would influence the country’s inflation trajectory.
“Milk production has been impacted by a lumpy skin disease infecting millions of cattle in late 2022,” the ministry said in the monthly economic review, adding that the vaccination drive against the disease is expected to curb the spread and immune the cattle against the skin disease.
According to official data, currently India is the world’s largest milk producer, and has a share of 23% in global milk production. For the first time in decades, the country’s milk production is likely to have stagnated in 2022-23 due to Lumpy Skin Disease in cattle across several states and the lagged effect of Covid-19 in the form of stunting of the animals, a senior official with department of animal husbandry and dairying recently had stated. The milk production was estimated at 221 million tonne in 2021-22.