In the futures market, crude oil for July delivery touched an intraday high of Rs 2,960 and an intraday low of Rs 2,902 per barrel on MCX.
Crude oil futures declined to Rs 2,908 per barrel on July 10 as participants increased their short position as seen by the open interest. Crude oil fell on concerns that rising coronavirus cases in the US and other parts of the world could impact demand.
The International Energy Agency (IEA) on July 10 raised its forecast for 2020 oil demand by 400,000 barrels per day to 92.1 million barrels per days but cautioned that growing coronavirus cases posed a risk to the outlook.
Tapan Patel, Senior Analyst (Commodities) at HDFC Securities said, crude oil prices traded under pressure on demand growth concerns and supply pressure due to surge in weekly inventories. The fear of restoring lockdown measures due to record virus cases has pressured oil prices with worries over fuel demand growth. The lack of clarity over an extension of output cut deal from OPEC plus nations has also kept investors in dilemma over future trends.
“NYMEX crude continues to fall as it fell below the $38/bbl mark in today’s session. After a day of narrow trading crude oil has witnessed selling pressure mainly due to risk-off sentiment in equity markets," said Ravindra Rao, VP- Head Commodity Research at Kotak Securities.
"As per the July 2020 IEA oil report released today, global oil supply fell by 2.4 mb/d in June, to a nine-year low of 86.9 mb/d whereas global oil demand fell by 16.4 mb/d year-on-year in 2Q20. Although prices have recovered in May and June IEA has shown some caution relating to the accelerating number of Covid-19 cases. We expect to see crude trading lower today with a focus on US weekly rig activity report and storm activity in Atlantic,” he said.
In the futures market, crude oil for July delivery touched an intraday high of Rs 2,960 and an intraday low of Rs 2,902 per barrel on MCX. So far in the current series, black gold has touched a low of Rs 1,655 and a high of Rs 3,153.
Crude oil delivery for July slipped Rs 68, or 2.28 percent, to Rs 2,918 per barrel at 15:12 hours IST with a business turnover of 4,165 lots.
Crude oil delivery for August edged lower by Rs 66, or 2.19 percent, to Rs 2,948 per barrel with a business volume of 137 lots.
The value of July and August's contracts traded so far is Rs 1,021.56 crore and Rs 6.36 crore, respectively.
Patel expects oil prices to trade down for the day with support at $37 and resistance at $41. MCX Crude oil July futures have support at Rs 2,860 with resistance at Rs 3,020.
West Texas Intermediate crude slipped 2.32 percent at $38.70 per barrel, while Brent crude, the London-based international benchmark was down 2.01 percent to $41.50 per barrel.For all commodities related news, click here