Crude oil futures slumped to Rs 4,763 per barrel on April 30 as participants increased their short positions as seen by the open interest. Crude oil declined on weak China factory activity data, surging coronavirus cases in India, Japan and Brazil despite upbeat US GDP data.
The energy commodity extended decline after a gap-down start to trade at day’s low in the afternoon session, tracking negative global cues.
The black gold has been trading higher than 5, 20, 50, 100 and 200 days' moving averages on the daily chart. The momentum indicator Relative Strength Index (RSI) is at 59.60 indicating positive movement in prices.
Crude oil has benefitted from improving demand outlook and increasing optimism about the US and Chinese economy and general improvement in the manufacturing sector. US GDP grew at 6.4 percent annual pace in the first quarter, up from 4.3 percent in the previous quarter.
“NYMEX crude trades lower by 1% near $64.3/bbl. Weighing on price is rising virus cases, mixed economic data from major economies and the prospect of higher supply from OPEC and Iran. However, supporting crude price is optimism about the US economy amid upbeat GDP data, the Fed’s dovish stance and President Biden’s announcement of additional stimulus. Crude oil has rallied sharply on US economic optimism however upside remains challenged by rising virus cases and the prospect of higher supply from OPEC”, said Ravindra Rao, CMT, EPAT, VP- Head Commodity Research at Kotak Securities.
West Texas Intermediate crude fell 1.42 percent to $64.09 per barrel, while Brent crude, the London-based international benchmark, fell 1.22 percent to $67.22 per barrel.
MCX iCOMDEX Crude Oil Index decreased 60.46 points, or 1.12 percent, at 5,332.53 at 15:32.
In the futures market, crude oil for May delivery touched an intraday high of Rs 4,806 and an intraday low of Rs 4,758 per barrel on MCX. So far in the current series, black gold has touched a low of Rs 4,219 and a high of Rs 4,863.
Crude oil delivery for May slipped by Rs 54, or 1.12 percent, to Rs 4,763 per barrel at 15:33 hours IST with a business turnover of 7,342 lots.
Crude oil delivery for June edged lower Rs 49, or 1.01 percent to Rs 4,782 per barrel with a business volume of 303 lots.
The value of May and June’s contracts traded so far is Rs 856.02 crore and Rs 16.32 crore, respectively.
Trading Strategy
Tapan Patel- Senior Analyst (Commodities), HDFC Securities
Crude oil prices pared previous gains over slower-than-expected China factory activity data. Crude oil demand recovery has largely relied on growth in China and the US. The disappointing data may keep oil prices under pressure for the day despite better US economic data.
The prices are expected to trade sideways to lower for the day with resistance at $67 and support at $62 per barrel. MCX Crude oil May has support at Rs 4,720, resistance at Rs 4,850.
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