Crude oil futures were slightly higher at Rs 4,689 per barrel on March 9 as participants increased their long positions as seen by the open interest. Crude oil has turned choppy as market players shift focus to weekly EIA inventory report due later in the day.
The American Petroleum Insitute (API) reported that US crude inventories rose by 12.8 million barrels for the week ended March 5 as against the expectation of a 0.81 million barrels increase.
The black gold has been trading higher than 20, 50, 100 and 200 days' moving averages but lower than the 5-day moving average on the daily chart. The Relative Strength Index (RSI) is at 64.91 which indicates positive momentum in prices.
The US EIA in its monthly report said that it expects US crude oil production to decline by 160,000 barrels per day in 2021 to 11.15 million barrels per day, a smaller decline than its previous forecast of a 290,000 bpd drop.
“NYMEX crude trades weak near $63.90 per barrel. Crude turned choppy today as market focus shifted to the weekly inventory report. API weekly report noted a much bigger than expected 12.792 million barrels increase in US crude oil stocks but also a sharp decline in gasoline and distillate stocks. Amid other factors, support from OPEC’s production stance, US stimulus and correction in US dollar is countered by selling pressure in Chinese equities and forecast of higher US output this year. Crude may remain choppy ahead of inventory report. On the technical front, a reversal candlestick dark cloud cover has formed indicating some correction in price”, said Ravindra Rao, VP- Head Commodity Research at Kotak Securities.
West Texas Intermediate crude was up 0.34 percent to $64.23 per barrel, while Brent crude, the London-based international benchmark gained 0.16 percent to $67.63 per barrel.
MCX iCOMDEX Crude Oil Index was up 12.44 points, or 0.23 percent, at 5,307.50 at 16:19 pm.
In the futures market, crude oil for March delivery touched an intraday high of Rs 4,696 and an intraday low of Rs 4,617 per barrel on MCX. So far in the current series, black gold has touched a low of Rs 3,800 and a high of Rs 4,967.
Crude oil delivery for March rose Rs 9, or 0.19 percent, to Rs 4,689 per barrel at 16:20 hours IST with a business turnover of 5,182 lots.
Crude oil delivery for April jumped by Rs 10, or 0.21 percent to Rs 4,715 per barrel with a business volume of 459 lots.
The value of March and April’s contracts traded so far is Rs 1,371.13 crore and Rs 18.80 crore, respectively.
Trading Strategy
Tapan Patel- Senior Analyst (Commodities), HDFC Securities
Crude oil prices witnessed selling on expectations of a rise in weekly inventories after the US API report showed an inventory build of 12.79 mb. The traders also weighed on the damage of attack on Saudi oil facilities as the operations were less affected.
Crude oil prices are expected to trade sideways to down for the day with resistance at $65 and support at $62.50 per barrel. MCX Crude oil March has support at Rs 4,590, resistance at Rs 4,720.
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