India Posts Robust Oil Data

The oil continues to bullishly run on the market as India’s January results were peaking at a new record high. Crude imports were skyrocketing in the previous month, a large number of refinery runs and the growing refinery capacity also pushes the strong demand and what a handful of analysts dub as the “strong recovery”.

The striking oil news from the country is buoying the oil prices in the market and a lot of investors and market analysts are looking at the possibility of the record high reports in India can sustain and support the ongoing bullish prices in the future.

Indian Oil Figures

Looking at the country’s January oil imports, they managed to tally a whopping 13.6% increase against the January 2017 figures and tallying a massive 12.5% increase versus the figures from the latter month, December 2017’s.

According to reports, the country’s state-owned refineries garnered a whopping two-thirds of the incredible 5 million barrels per day that the country has pushed in the previous quarter. Reports also revealed that the country has been looking to rally the run rates for January until March of this year to meet the targets the government declared.

Furthermore, the high imports and run rates have also been stemming from the highly anticipated spring maintenance in the country’s local refineries. This managed to increase the great results alongside the strong demand and refining margins. Analysts also stated that the country has been running a massive barrels per day production, peaking at 5.27 million bpd.

Bullish Price on Higher Imports

The previous robust import data from India last January is already taking the over the market as analysts and economists are debating on what this can actually mean for the oil prices in the future. Analysts are debating on whether the robust import can keep the oil prices bullish the in the future and eventually impact the benchmark future prices as well.

According to the Indian government, the local annual fuel demand was up by a massive 10.3% from the prior month. Meanwhile, the consumption of diesel and gasoline were also up from the previous month by double-digit figures.

Analysts noted that it is going to be possible given that the country continues to boost their manufacturing in the next few years. According to reports, India is looking to attain just that with a massive 2030 target; they revealed their plans on increasing the refining capacity by a whopping 77% by that year to an 8.8 million barrels per day production.

Higher taxes likley to weigh UAE Gold jewelry imports

DUBAI (Scrap Register): Higher taxes appear to be a growing issue for gold-jewelry wholesalers in the United Arab Emirates, although other issues are also at play, said Metals Focus.

The consultancy cited two tax changes in recent years -- a 5% import duty on jewelry at the start of 2017 and a 5% value-added tax this year. This has accompanied a slump in gold jewelry imports into the UAE, with last year’s inflows roughly half those in 2014, analysts reported.

Gold jewelry consumption in the UAE has been fallen from just over 64 tonnes in 2013 to under 43 tonnes last year. Drivers include political tensions and armed conflicts in the region, weak energy prices, lower government revenues, rising living costs and deteriorating consumer sentiment. 

However, analysts said they also believe that the UAE has, to some extent, declined in importance as a hub for wholesaling. For instance, jewelry imports into Iran and Iraq are thought to have grown last year, while Italian data show that through October, Italian gold-jewelry shipments to Turkey rose 35% year-on-year and to Lebanon by 75%. 

Further, there has less buying by Indians visiting the UAE due to reduced price differentials between purchases at home and in the UAE. “Industry sources…inform us that jewelry imports into the UAE this year so far are severely depressed,” Metals Focus noted.

To an extent, this is partly due to some importers pulling forward imports into December last year to beat the 1st January deadline [for higher taxes]. Some are hopeful that the worst damage has now passed and that a tentative recovery could soon start, in part as wholesalers and their customers adjust to the new regime.

However, it seems highly likely that imports will remain sluggish for the entire first quarter and perhaps for the whole of 2018 due to further market share loss to other wholesaling hubs, greater purchasing at home by Indian consumers and poor sales within the UAE itself.

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