Crude oil futures rose to Rs 4,340 per barrel on February 22 as participants increased their long positions as seen from open interest. Crude oil prices jumped on worries that refineries shut by a big freeze in the US south will take some time to revive operations and dent crude demand.
Four of the largest refineries in Texas expect to be down for weeks of repairs after widespread damage.
Crude oil prices witnessed selling in the second half of the last week as higher oil prices raised speculation over an increase in oil production from OPEC plus nations.
The number of rigs drilling crude oil in the US fell by 1 to 305 rigs for the week to February 19, said Baker Hughes in a weekly report.
The CFTC data showed that money managers increased net long positions to 2 years high by 10,022 lots last week.
“NYMEX crude trades modestly higher near $59.5/bbl. Crude steadied after two days of decline amid stable equities, the first decline in US crude rig count since November, Saudi and Russia’s diverging view on production and Iran’s emphasis on lifting sanctions before talking to the US. However, weighing on price is improving weather in the US which has led to some production restart. Crude has come off recent highs on prospect of improved supply and we may see some extended losses amid position squaring near contract expiration”, said Ravindra Rao, VP- Head Commodity Research at Kotak Securities.
West Texas Intermediate crude was up 0.76 percent to $59.71 per barrel, while Brent crude, the London-based international benchmark soared 0.74 percent to $62.60 per barrel.
MCX iCOMDEX Crude Oil Index was marginally higher 38.47 points, or 0.79 percent, at 4,908.11 at 16:46.
In the futures market, crude oil for March delivery touched an intraday high and low of Rs 4,372 and Rs 4,325 per barrel, respectively on MCX. So far in the current series, black gold has touched a low of Rs 3,800 and a high of Rs 4,515.
Crude oil delivery for March gained Rs 36, or 0.84 percent, to Rs 4,340 per barrel at 16:48 hours IST with a business turnover of 4,877 lots.
Crude oil delivery for April jumped Rs 33, or 0.76 percent to Rs 4,353 per barrel with a business volume of 2,246 lots.
The value of March and April’s contracts traded so far is Rs 958.69 crore and Rs 1.52 crore, respectively.
Tapan Patel- Senior Analyst (Commodities), HDFC Securities
Crude oil prices witnessed recovery as some of the lost oil production has returned on line in Texas. The resume of refinery operations will bring oil demand back on track.
We expect crude oil prices to trade higher with support at $58.50 and resistance at $61. MCX Crude oil March has support at Rs 4,290, resistance at Rs 4,380.
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