Oil prices marched uphill on Wednesday in a strong rebound from recent lows following an unexpectedly large dip in US crude stocks. Benchmark North Sea Brent crude for November delivery was trading 37 cents higher at $22.42 a barrel at around 1000 GMT after spurting to a high of $20.60. The market's volatile display has seen prices slump 17 per cent between September 29 and October 8 and rebound 12 per cent to the October 13 high.

Current levels are more than $2 above a trough of $20.20 touched last week in a slump set off by jitters about growing output from the Organisation of the Petroleum Exporting Countries. The upswing gathered pace with data from the American Petroleum Institute (API) industry group showing weekly crude stocks in the world's largest oil consumer lower by 7.1 million barrels at around 299 million barrels. This compared with market expectations that the stocks would be down just 1.25 million.

Traders said they expected prices to climb further, resuming an eight-month-old rally interrupted last week by a big speculative sell-off. Analysts say that although OPEC output discipline has eased, its self-imposed curbs are still strong enough to cause a large slide in the world's stockpiles of stored oil this winter.`` Although OPEC compliance is weakening gradually, demand over the next few months should more than offset rising OPEC output,'' said Mehdi Varzi of Dresdner Kleinwort Benson.

Soybean production

India's soybean production in 1999-2000 (October-September) is expected to fall to 5.2 million tonnes from an estimated 5.9 million in the previous year, the Soybean Processors' Association of India (SOPA) said on Tuesday. India's area under winter soybean cultivation in 1999-2000 is seen lower at 5.65 million hectares, down 11 per cent from last year, the Indore-based SOPA said. Indore is one of the main cities in the central state of Madhya Pradesh, which is the country's soybean bowl and accounts for about 75 to 80 per cent of India's production. The industry body at its annual general meeting held on Tuesday revised India's 1998-99 soybean output estimate to 5.9 million tonnes from its previous estimate of 6.2 million.

Commodities prices up

A hike in diesel prices has already pushed up some Indian commodities' prices by raising freight costs, and they will surely rise further in coming days. Traders are worried that steep prices could mean lower consumer demand in the traditionally consumption-heavy Hindu festival season, now underway. Another force driving prices higher is an imminent truck operators strike across India from October 21 in protest against the October 5 increase of about 33 per cent in diesel prices.``Commodity prices have already started showing an upward trend,'' a senior food ministry official told Reuters.

``They will certainly rise further.'' Commodity analysts say export prices of soymeal have already risen by at least $5 per tonne because truckers have raised their freight charges in some regions.``The rise in soymeal prices because of the rise in diesel prices cannot be passed on to the foreign buyer,'' president of the Solvent Extractors' Association of India, Sandeep Bajoria, told Reuters.``It is the processor whohas to bear the brunt.''

Trade and industry officials say oilseeds, already costly due to a local shortage, will become even more expensive as the Indian consumer is saddled with the additional burden.Demand is at its peak because of the Hindu festival season, and domestic oilseeds crop arrivals have yet to start in full strength. Traders have been trying to tackle a shortfall in the domestic winter oilseeds crop by importing edible oils.``Prices will rise and will remain at those levels in the near future,'' Bajoria said.

Dry fruit easy

An easy trend prevailed on the Delhi fruit market on Wednesday with prices of almond, abjosh and dry dates dropping on increased selling pressure. Almond california dropped by Rs 200 to Rs 6500 from last close of Rs 6700 per 40 kg. Abjosh and dry dates were also quoted lower by Rs 300 each at Rs 8000-8400 and Rs 2100-4700 from previous close of Rs 8000-8700 and Rs 2100-5000 respectively.The volume of business was moderate.

(Reuters & Agencies)