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The rupee is trading at 60.02/03 versus its Friday's close of 60.0850/0950, as the dollar makes losses versus most other Asian currencies.The rupee is seen holding in a 59.80 to 60.30 range during the session. Demand for the greenback from oil refiners looking to meet month-end demand is expected to limit any sharp downward pressure on the USD/INR pair.Most Asian currencies stronger against the dollar.Traders will monitor the domestic share market for clues on the direction of foreign fund flows. The BSE Sensex is up more than 250 points.Asian share markets edged cautiously higher while the dollar stayed under pressure ahead of packed week of economic data that will test investor hopes for a pick-up in the US and global economies.(Reuters)
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The workforce reduction that began three years ago is now behind us”— John Chen, CEO, BlackBerry, in a memo to employees, declaring the company is, in fact, ready to begin modest hiring in certain areas of business“There are no signs of industrial development in West Bengal”—Ratan Tata, chairman emeritus, Tata Sons, at an interactive session “Perhaps he (Ratan Tata) has lost his mind... He should rather focus on other hobbies like flying an aeroplane”— Amit Mitra, finance minister, West Bengal, in response to Ratan Tata’s comment on the state’s lacklustre industrial scenario “BSNL will not be allowed to die”— Ravi Shankar Prasad, telecom minister, vowing to revive state-owned Bharat Sanchar Nigam“We’re not lacking something that we need”— Jeff Bewkes, CEO, Time Warner, at a conference, making clear that he doesn’t believe Time Warner needs to combine with any other big company“It’s our pound and we’re keeping it, come what may”— Alex Salmond, first minister, Scotland, indicating that an independent Scotland will use sterling even if a formal sterling zone is rejected by the UK government“HBO rocks, and we are honoured to be in the same league”— Reed Hastings, CEO, Netflix, after the digital entertainment company topped HBO in subscriber revenue“There are few places in the world other than India and the US where the son of a tea seller in a small-time town can rise to be the prime minister (Narendra Modi) or the child of a Kenyan father can rise to be the president (Barack Obama)”—Chuck Hagel, US defence secretary, while talking about the opportunities available in the two countries, on a visit (This story was published in BW | Businessworld Issue Dated 08-09-2014)
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Traders in Maharashtra have rejected the State Government's proposal to substitute the controversial LBT (local body tax) with a new levy.In a joint release issued late last night, President of Federation of Associations of Maharashtra (FAM) Mohan Gurnani and Vice-President of Thane Small Scale Industry Association (TSSIA) Sandeep Parikh said they are opposed to the Government proposal of "new tax" in lieu of LBT.They said representatives of industry and trade from all the 26 municipal corporations in the State met with Government officials here yesterday.At the meeting, Sudhir Srivastava, Additional Secretary (Finance) and Nitin Kareer, Commissioner, Sales Tax explained the proposed new tax.The industry bodies deliberated the Government's proposal at length. Post-discussion, representatives from all the 26 corporations decided to reject the new tax proposal, the release said.The new levy lacks clarity and has multiple rates. Its implementation may lead to cascading effect, it said.Gurnani and Parikh said the Government should accept the traders' demand to subsume LBT into VAT (value-added tax).LBT is a tax imposed by local municipal corporations on the entry of goods into a "local area for consumption, use or sale". It is supposed to replace octroi.(PTI)
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The death toll in the GAIL pipeline fire tragedy in East Godavari district of Andhra Pradesh rose to 16 with an injured succumbing on Saturday (28 June), while six persons were battling for life with severe burns, police said.At least 15 persons were killed and nearly two dozen others injured when an apparently leaking gas pipeline of GAIL caught fire and triggered a blast in Nagaram village in the coastal district, about 560km from here, on Friday (27 June)."A baby girl, who was undergoing treatment for severe burns, died on Saturday at a private hospital in Kakinada. With this the toll in the incident rose to 16," East Godavari District Superintendent of Police G Vijay Kumar told PTI over phone.The SP said 20 others who suffered burn injuries were undergoing treatment at different hospitals. The condition of at least six of them remains critical as they have suffered around 80 per cent burns.The leaping flames from the pipeline passing through the village in Mamidikuduru mandal quickly swept through nearby houses and coconut plantations, leaving behind a trail of destruction.Leaking gas had enveloped some areas of the village and the tragedy occurred when a tea shop vendor lit up a stove, setting off a blast, police had earlier said.(PTI)
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Housing projects for the urban poor have failed to keep up with the pace of urbanisation in India. As a consequence, several families live in cramped, sub-standard and often rented accommodation, with limited access to civic amenities. And it is not just the poor. Even families with a monthly household income of Rs 10,000-25,000, who can afford to buy houses priced between Rs 4 lakh and 10 lakh without any aid from the government, face similar conditions.According to our State of the Low-income Housing Market report, 15 million new homes in the low-income category are required, translating into an opportunity of Rs 9 lakh crore for developers and Rs 7 lakh crore for housing finance companies.An Active But Limited Private SectorThe report highlights that 78,000 houses (built on private land) have been sold in over 130 projects across 22 cities in India by private developers without any significant assistance from the government. In fact, with access to housing finance for formal and informal (with no proof of income) low-income customers improving, private developers are building more low-income housing (LIH).While this clearly demonstrates the viability of low-income housing, the numbers are way short of what is required. We need millions of houses, not tens of thousands. Ashish Karamchandani, Vikram Jain & Aditya AgarwalAn Emerging EcosystemDevelopers building LIH are mid-sized, see opportunity, and intend to continue developing LIH:• The vast majority, 86 per cent of the 27 LIH developerswe interviewed, was confident about the viability of their business. And 90 per cent intended to continue build ing LIH. The fact that two-thirds of the developers were already on their second or third project goes to show the economic viability of the business• The developers were typically small and medium regional developers who started serving the segment because of the potential demand and not social motivations.Most LIH projects sell 80 per cent units within 12 months, confirming the robust demandMost LIH projects are mixed-income and most houses are between Rs 6 lakh and Rs 10 lakh:• Sixty per cent of the total supply is in mixed-income projects with units above and below Rs 10 lakh• Thirty per cent of LIH supply was priced under Rs 6 lakh. A robust supply was also seen in Rs 10-12 lakh price point (see Limited Supply) Housing finance companies (HFC) serving informal low-income buyers are enabling inclusion:• Nearly 75 per cent of the informal sector customers had never taken a loan from a formal financial institutionbefore• The new HFCs have a combined loan portfolio of Rs 1,000 crore. Growing at 100-300 per cent per annum, they have near-zero non-performing assets (NPA). The number of players is growing and so is the geographic coverage of each playerEncouraging The Private Sector The government is becoming increasingly cognisant of the role the private sector can play in addressing the housing needs of low-income families. A number of government initiatives at the Centre (like Affordable Housing Task Force recommendations), state (Rajasthan and Orissa’s affordable housing policies) and urban local body level have taken steps to incentivise the private sector to create housing for the urban poor. They have used various supply-side interventions, including mandating reservations, providing subsidies (extra floor space index, reduced taxes), faster approvals and earmarking land for low-income group housing. The government has also introduced demand-side interventions for beneficiaries, including interest rate subsidy and reduced taxes (stamp duty, registration, etc.).The greater the number of beneficiaries served by the private sector, the lower is the burden on the government and the incidence of new slums. This way cities can soon become ‘slum-free’. break-page-breakPoor Man’s Dream The report further shows that low-income customers are happy with their new homes. Improved living conditions, secure neighbourhoods, bigger homes and better utilities are some of the functional benefits cited by them. The houses have also had a positive psychological impact on people. They felt a sense of upgradation, a feeling of belonging,pride of ownership and a surge in aspirations.Lack of clarity on maintenance responsibilities, longer commutes to workplaces and increased cost of living were some of the challenges cited by customers, but for most of them it was a dream come true.Private Sector’s Limitations The LIH market — housing and housing finance — has grown manifold. Yet, the gap between the current supply and the estimated demand is significant. For a potential need of 13-15 million units for households that earn between Rs 10,000-25,000 per month, so far 78,000 LIH units have been launched as per our records.The top three challenges cited by LIH developers are rising land prices, construction costs and long approval timelines. Limited access to debt and high cost of debt are the two key challenges cited by HFCs. The affordability of low-income customers has to be improved so more familiescan be a part of this growing market.Empowering LIGsThe government can create a conducive environment to enable millions of low-income customers to buy a pucca house. It can ensure faster approvals, develop infrastructure to increase supply of affordable and serviced land, ensure conducive regulation that directs housing companies to treat debt to low-income customers as priority sector lending (and thereby address the access and cost concerns of the housing finance companies) and reduce stamp duty and registration taxes for the end-customer, among other things.In a private sector-driven market, where the developer determines the price, any subsidy given to the developer may not be passed on to the beneficiary. If subsidies are to be provided — and they should be provided to enable more low-income families to buy private-sector-led housing — they should be given directly to customers. A good example of this is the interest rate subsidy provided to low-income group customers (a 5 per cent interest rate subsidy on loans up to Rs 5 lakh) by the government.What The Government Needs To Do?While foreign direct investment has been relaxed, most of the development seen in this sector is by small developers who typically do not have access to these funds. The sum of Rs 4,000 crore that has been offered to National Housing Bank should help reduce the cost of home financing, but first the supply of housing has to be upped. While the recent announcements signal good intent, their impact could be limited. The government needs to be more active about creating an enabling environment — as described above — to help realise the dreams of millions of low-income Indian families.Jain, Agarwal and Karamchandani are with Monitor Inclusive Markets, a unit of Deloitte(This story was published in BW | Businessworld Issue Dated 08-09-2014)
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The narendra Modi government has instructed its ministries not to file suits against each other. Welcome as it is, the move should be only the first step in the much-needed reform of the government’s litigation policy. To be sure, one such policy exists, dating back to 2010; it says the easy approach of ‘let the courts decide’ must be ‘eschewed and condemned’. That rule is followed more in the breach. The new diktat must not meet that same fate. Government litigation, say lawyers, eats up the lion’s share of courts’ time. A similar policy on appeals must be implemented. Appeals, especially in tax, should not be resorted to simply because the avenue is open. The government should dissuade its companies from not honouring commitments knowing that the dispute resolution in India takes years. — Abraham C. MathewsA Cracking Diwali?For the second time in a row, the statutory liquidity ratio (SLR) or funds that banks have to mandatorily invest in government securities (G-Secs) has been cut to 22 per cent. Mint Road had cut the SLR to 22.5 per cent in June. While there may be no immediate cut in bank lending rates, the feeling is that Mint Road has adopted a wait-and-watch policy. Had it gone for a cut in its key rates — repos rate or cash reserve ratio — at this stage, it might be seen as being hasty given the upside pressures on inflation despite its recent moderation. In any case, the two are blunt instruments. It’s better to cut the SLR; in effect, banks need to invest less in G-Secs and have more to lend to India Inc (for the record, the surplus over the minimum SLR is now about six per cent). Diwali is just two months down the line! — Raghu MohanA Taste Of Its Own MedicineThe insurance laws (Amendment) Bill that aims to hike FDI in insurance to 49 per cent is stuck for the moment. While the Lok Sabha has cleared it, the Congress-dominated Rajya Sabha is planning to send it to a Select Committee. Essentially, that means Narendra Modi’s first major reform has hit the skids. He will not be in a position to impress the US when he visits the country in September. The current Bill has 97 amendments to the original one introduced by the UPA in 2008, which the BJP had successfully stalled. The Congress argues that the current Bill is very different from the original one. The BJP government, on its part, is seeking a time-bound scrutiny by the committee so that the Bill gets passed soon. In case that happens, the Bill could get passed in the Winter Session. — Anup JayaramConflicting CountsPoverty estimates in the country have always been debatable. According to the Rangarajan Committee, 29.5 per cent of Indians are living below the poverty line. Earlier, the Suresh Tendulkar panel had estimated the proportion of such people to be 21.9 per cent. Now, the World Bank says there are just 100 million Indians below the poverty line. It has revised its earlier estimate of 400 million poor based on the purchasing power parity index in 2005. Statistically speaking, this means less than 10 per cent of Indians are poor. The danger with these differing figures is that they become the basis for rollout of the government’s welfare programmes. A more reliable method would be to engage the country’s 25,000-plus gram panchayats in identifying households that are really poor and then plan and roll out welfare schemes. The human touch is always better than statistical estimates in such matters.— Joe C. MathewA Cloud Over The MonsoonWith the Met department lowering its forecast for June-September rainfall to 87 per cent of the long period average, the worry lines on farmers’ foreheads are growing. Given the trickle-down effect of scanty rainfall on inflation and the economy and the fact that climate change is an alarming reality, there has been much talk of scaling down dependence on monsoon by expanding irrigated farmland. Currently, 50 per cent of India’s farmlands have no access to irrigation. But that will take time. Meanwhile, in some pockets new varieties of wheat and rice that need less water have been tried out successfully. Elsewhere, moisture sensors are being used so that farmers know when is the right time to sow. Till the time our farmlands get access to irrigation, the crying need of the hour is more such low-cost solutions that can provide some respite to rain-deprived farmers. — Chitra NarayananRisky RoutePower majors Adani Power, Tata Power and Reliance Power are looking at acquiring the operational power plants of distressed players in their hunt for growth. With 50,000 MW of generation capacity up for sale, any serious player with a long-term horizon must go for the kill at a time when assets are priced at their lowest. However, a look at the balance sheets of these companies suggests they are taking a huge risk. Take, for instance, Adani Power which has bought the 1200 MW Udupi power plant from Lanco Infratech for Rs 6,000 crore. The company has a debt of Rs 22,317 crore, with cash and bank balance of just Rs 412 crore. The company should be careful in charting such a growth path, for it may throw its finances out of gear. — Neeraj ThakurNeighbourhood WatchPrime Minister Narendra Modi’s recent visit to Nepal, the first by an Indian prime minister in 17 years, was part of his outreach policy in the neighbourhood. Modi offered a $1 billion line of credit to the land-locked country. But two key agreements, the Power Trade Agreement (PTA) and Power Development Agreement (PDA), were not signed. The dispute over the PTA was that it allowed only the Indian government and entities to build hydropower projects in Nepal. That needs to be sorted out before the agreement is signed. It must not be forgotten that in Nepal, China too is interested. After all, the Himalayan rivers can generate a potential 42,000 MW of power. While Modi’s outreach is commendable, the Indian government needs to sign the deals too. That will be the test of true diplomacy. — Anup JayaramHandset HighnessesHomegrown handset maker Micromax recently claimed it had displaced Samsung as India’s largest selling mobile phone brand. Though Samsung was quick to trash the claim, one thing is clear; the Indian brand has come up strongly to pose a challenge to the Korean handset maker. Some say Micromax may do to Samsung what the latter did to Nokia not too long ago. Adding to the heat are other local players like Karbonn besides Chinese and Taiwanese handset makers that have been launching smartphones at attractive price points with all the hardware features of hi-end handsets. As things stand now, even if Samsung hasn’t lost the number one spot yet, it may soon do so to one of the Indian or Chinese players in the volume game. The moot question is: Will Micromax be able to main its leading position for long? It can if it follows and improves upon the Samsung strategy of staying ahead of the consumer expectation curve and giving them full freedom in selecting not just the model but even software specs. — Sachin DaveThe REIT Thing For RealtyWith the SEBI guidelines for Real Estate Investment Trusts (REIT) and Infrastructure Investment Trusts (InvT) in place, an effective instrument for investment in realty and infrastructure projects has been finally legalised. REITs will operate in commercial real estate through special purpose vehicles in which they must hold a controlling stake of more than 50 per cent. In many areas, the SEBI norms are sweeter than what the Budget promised. For instance, SEBI has fixed the starting minimum asset value for a REIT and InvT at Rs 500 crore or more, while the Budget proposals had suggested Rs 1,000 crore. The initial offer has to be Rs 250 crore or more. Today, commercial/office realty is in a slump while urban infrastructure is starved of funds. Now, these instruments will ensure a funding pipeline, which could be as large as $20 billion over the next year. - Gurbir SinghRinging In A New Marketing StrategyAt 2 pm on August 12, the newest darling of tech street, Xioami, put 20,000 units of its Mi3 smartphones on Flipkart. Within seconds the phones got sold out. Xiaomi phones are exclusively being sold on the e-commerce platform in India. And it has shrewdly been selling the phones in small batches, creating a buzz. This was the fourth batch. Xiaomi is not the only one to enter into exclusive deals with Flipkart. Motorola was the first one to come riding on an exclusive arrangement with Flipkart with its Moto X, G phones. And taking a leaf out of the the phone companies marketing manual, Author Chetan Bhagat and his publisher Rupa too have entered into an exclusive arrangement with Flipkart for his latest book, Half Girlfriend. According to Jagdish Sheth, 4 As are essential to marketing — Acceptability, Affordability, Accessibility and Awareness. But looks like making a product inaccessible can work too! — Chitra Narayanan(This story was published in BW | Businessworld Issue Dated 08-09-2014)
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Production at the 1,466 megawatt Kondapalli power plant of the Lanco Group in southern India has fallen "slightly" after a blast on Friday (27 June) at a pipeline supplying it with gas, a spokesman for the company operating the plant said.Lanco Group, which operates the plant in Andhra Pradesh, is now sourcing gas from an alternate line, the spokesman said.More than a dozen people were killed on Friday after a blast at a gas pipeline operated by state-owned energy company GAIL (India) Ltd.(Reuters)
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Industrial licenses would be required only to make items such as tanks and other armoured fighting vehicles; defence aircraft, space aircraft and parts; warships of all kinds; and arms and ammunition and allied items of defence equipment, parts and accessories.According to an official, this clarification would help to attract investments from private companies.Those companies who are making equipment, casings and other smaller items and are not fully integrated as weapon system have been left out of this list, defence sources said."Items not included in the list would not require industrial license for defence purpose. Further, it is clarified that dual-use items, having military as well as civilian applications, other than those specially mentioned in the list, would also not require industrial license for defence angle," the Ministry of Commerce and Industry said in a statement.Defence items are covered under compulsory licensing under the Industries (Development and Regulation) Act, 1951.The official said the industry had raised the issue as there was confusion over several dual-use products."This clarification will also help in attracting more investments in the sector," the official added.51% FDI Cap To Boost Defence IndustryMeanwhile, a government source said today that raising foreign direct investment cap to at least 51 per cent in the defence sector will help India become a major manufacturing and export hub, reducing dependency on imported equipment."India can be a game-changer only by allowing at least 51 per cent FDI in the sector. With access to critical technology, the domestic companies will be able to manufacture products indigenously and make India a global defence manufacturing and export hub," said a government source.India imports defence equipment worth over USD 8 billion annually. It is one of the largest defence importers in the world with only a minuscule component of exports.Allaying concerns of few domestic industries, the sources said that the proposal mooted in the draft note has enough safeguards to protect this sensitive sector."Giving controlling stake to a foreign player will be an incentive for them to bring modern technologies in India.Besides making India as their manufacturing centre, they will also export from here. It would lead to creation of jobs," said a source.While the government is holding inter-ministerial consultations, intense lobbying is being witnessed within the major industry chambers, the sources said. A section of the domestic industry, with less than 1 per cent share in the sector, holds a view that the FDI should be restricted to 49 per cent, while another view is that without a majority stake why would the global investor invest in India, they added.They said that caping FDI to 49 per cent is not going to help. It would be a status-quo type situation."India should not lose this chance. To become self-reliant in defence sector, 51 per cent FDI must be allowed. Between 2001 and August 2013, 49 per cent foreign investment (26 per cent FDI + 23 per cent FII) was allowed. During this time, India has attracted only USD 5 million investments, which is lowest in any sector," the source said.Between 2001 and 2013, India has received about USD 320 billion in foreign investment. The figures clearly reflect that India has not received any investment when the cap was 49 per cent.The sources also argued that due to sagging economies in the West, multi-national companies want to expand their manufacturing base in Asia and India can become a major centre for that."Now the country cannot afford to miss the bus. Fixing foreign investment cap to 49 per cent will not help in getting modern technologies. Figures are clearly reflecting that 49 per cent foreign investment has not changed anything. It will be a game spoiler," they added.
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Ignoring UGC's directive to start the admission process for undergraduate courses this morning, Delhi University on Thursday (26 June) threw the ball back in the Commission's court by sending it a proposal suggested by academicians to resolve the issue.The UGC had last night set a deadline of this morning for the Delhi University to roll back the controversial four-year undergraduate programme and start admission for the old three-year structure.In response to the UGC's order, the DU sent a letter this morning to the Commission which said "the university is of the opinion that given the situation where admissions are being delayed, time is the essence and hence this blended proposal submitted by some eminent persons to the UGC and DU may provide the necessary way forward."This proposal entails admitting all students to a three-year undergraduate course with honours and will also obviate the need to call for fresh registrations. We await your response in order to convene the statutory bodies at the earliest in the best interest of the students and the academic community," the letter signed by DU Registrar Alka Sharma read.Speaking to media persons, DU's Media Coordinator Malay Neerav said, "We received a new proposal wherein the honours degree will be given in 3 years. We won't need much time to implement this proposal. We have written a letter to UGC stating the same. We are now awaiting UGC's response on the new proposal from UGC."As uncertainty looms over the DU admission process, Neerav said time was "very precious" and the proposal which has given a six-point formula suggesting that honours degree be given in three years would be much easier for the university to implement and start the admissions at the earliest."UGC has been writing letters to us urging us to start admitting students based on the old three-year format. We have told them that we need time to follow the old procedure because there are course committees, statutory bodies and they will need to meet for that purpose.However, if we can tweak the existing (+4) course into the +3 format wherein BA (Hons) Degree will be given in 3 years and we can start admitting the students as soon as possible," Neerav said.The DU Registrar had on Wednesday (25 June) said that the university has received a "document" from some eminent citizens outlining "concrete" suggestions for the solution of the current situation as it exists.The proposal suggested a three-year honours programme that is devised by reverting to several features of the old semester format and reducing the existing courses that are not of the honours stream under FYUP.It also suggested that the existing B Tech courses should be left untouched except for reduction in the number of foundation courses.The proposal further suggested that the university may wish to offer fourth year of study which can be done by creating a Honours by Research programme within an overall credit based system with the approval of all regulatory bodies."While welcoming this initiative, the University is examining in detail the document and is working with the expectation that the admission process shall be able to commence soon," Sharma had said in her statement yesterday.The proposal, suggested by a group of academicians and eminent persons including Guru Gobind Singh Indraprastha (GGSIP) University Vice Chancellor Anil Tyagi, Panjab University VC Arun Grover, St Stephen's college principal Valson Thampu and professor Vijay Choudhary, was submitted to Vice Chancellor Dinesh Singh.Nandita Narain, Delhi University Teachers Association President and member of a 10-member Standing Committee of the UGC, criticised the proposal and said it was "formatted suggestions" and an "easy way out".Meanwhile, hundreds of students staged a protest outside VC's residence demanding complete rollback of FYUP. They sat outside the residence blocking traffic and raised slogans.Police presence has been beefed up in the area and barricades have been erected outside the VC residence.(Agencies)
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Brent crude edged up towards $102 a barrel on Tuesday (19 August), but stayed near a 14-month low reached in the previous session on weak demand and easing concerns over risks to supply.Brent shed nearly $2 on Monday (18 August), as investor worries over conflict in Iraq eased, and as higher Libyan oil output added to already ample supplies."There is still plenty of oil in the market, mostly due to weak demand from refineries in Europe and Asia," said Yusuke Seta, a commodity sales manager at Newedge Japan."At the moment, I don't see any factors that could possibly bring demand back into the market."Brent crude for October delivery had risen 23 cents to $101.83 a barrel by 0522 GMT, after closing $1.93 a barrel lower on Monday.US crude for September delivery was 34 cents higher at $96.75 a barrel. The contract, which expires on Wednesday (20 August), ended the previous session down 94 cents."Brent could test $100, but should find very very strong support at that level. OPEC countries will take action if oil goes below $100 because they won't be able to maintain their budgets," said Seta.Higher US Oil StocksIraqi and Kurdish forces recaptured Iraq's biggest dam from Islamist militants with the help of US air strikes to secure a vital strategic objective in fighting that threatens to break up the key oil producing country.In Ukraine, government forces advanced on pro-Russian rebels, but continued fighting in the country suggests the risks are far from over. Dozens of people, including women and children, were killed on Monday as they fled fighting in eastern Ukraine when their convoy of buses was hit by rocket fire.The US dollar gained against a basket of major currencies, while global equities also rose with Nasdaq hitting a 14-year high on Monday, supported by positive US housing data and decreasing worries over Ukraine. A stronger greenback could drag on dollar-denominated oil.The UN nuclear watchdog chief on Monday said Iran had begun implementing transparency measures ahead of an Aug 25 deadline, as part of a long-running investigation into suspected atomic bomb research by Tehran.US commercial crude oil and refined product stockpiles were forecast to have fallen in the week to Aug 15, a preliminary Reuters survey of analysts showed.The analysts estimated, on average, that crude oil stocks decreased 1.5 million barrels last week. Distillate stockpiles were seen down 200,000 barrels, and gasoline inventories down 1.7 million barrels.The survey was taken ahead of weekly inventory reports from industry group the American Petroleum Institute (API) due at 2030 GMT and from the US Department of Energy's Energy Information Administration (EIA) due on Wednesday.Despite falling inventories in the United States, large crude builds globally in the second quarter is now reflected in the weak market structure known as contango, where prices for prompt delivery is cheaper than for future months, analysts at Energy Aspects said in a note."Signs of a sustained demand recovery, and hence stockdraws, are needed to change the shape of the further forward Brent structure, even if potential new supply disruptions did not materialise," the analysts said."The market may need flat price to fall below $100 in order to stimulate demand, especially given the weakening macroeconomic backdrop," they said.(Reuters)
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