Guar seed and Guar gum price are down but Crude oil is moving toward USD 70 / barrel.

Guar seed and Guar gum prices are down due to profit booking in the forward market. Guar gum is used in oil and natural gas industry for crude oil production. Crude oil prices are increasing due to production cut by OPEC countries. Crude has recovered approximately 8-9% during last week. US shale crude oil production is increasing its production to meet the global demand, while OPEC is decreasing the production to tighten the supply. It is a global crude war between two rivals group of crude oil production. It was also observed that stocks of oil drilling service provider companies are also up by 8-10%. These companies are getting enough cash for their operation from their customers. 

USA is ambitious to become the major crude oil producer inworld by overcoming Saudi Arabia and Russia. Geopolitics conditions are in favor of USA. After Gulf and Russia, other oil prodding countries are politically unstable and crude oil production is collapsing. Venezuela is facing economic sanctions and crude oil production has been collapsed. Libya, Iraq, and Syria are unstable. Investors are avoiding these countries. USA is the favorite destination for oil and gas investors.

Guar gum prices are down in fear of oversupply in the market in the coming month. There is the pressure of profit booking in the forward market. This downward movement looks speculative. Fundamentally Guar seed and Guar seed is strong enough. All the fundamental price factors are positive. Guar seed production is limited. Guar seed supply is limited, this year Guar gum demand is higher than previous years. 

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During last two months (January and February) Prices of Guar seed are stable above 4000 level. There are so many factors which are responsible for price movement. Even in the forward market, there is the open interest of 2,00,00,000 (2 crores) bags of Guar Seed. It means buyer and seller both are standing for this much of Guar seed quantity. From 16th Feb to 23rd Feb 2018, oil rig count has reached to 978 which is 3 rigs more than the previous week. 

AS per govt decision, govt will decide higher MSP of Kharif pulses than the previous year. This will lead to higher sowing area of Kharif pulses and lesser cultivation area of Guar Seed. Guar seed production will be lesser in next cropping season. As per global organizations, USA will lead in oil production in the year 2018. USA product crude oil with fracking technology. Guar gum is used as drilling chemical and gelling agent in the fracking process. 

Today Guar seed and guar gum price are stable in the local market. Good quality of guar seed is traded at Rs 4400/100Kg and average quality guar seed is traded at Rs 4200/100 Kg. Standard quality guar gum is traded at Rs 9500/100 kg. In interior location, guar is traded up to 4100/100 Kg. guar seed is being traded week in the future market. At NCDEX (National Commodity & Derivatives Exchange Ltd) guar seed-10MT is being traded at Rs 4274, 4281, 4310 lower by 0.11 percent or INR 4.5/100 Kg, 0.28 percent or INR 12/100 Kg, 0.34 percent or INR 14.5/100 Kg with the open interest of 106930, 73050, 4380 for March April and May month.

Guar gum is being traded weak in the future market. At NCDEX (National Commodity & Derivatives Exchange Ltd) Guar gum- 5MT is being traded at Rs 9175, 9270 lower by 0.22 percent or Rs 20/100Kg, 0.29 percent or Rs 27/100 Kg, with the open interest of 45470, 31850, for March and April contract.

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