Crude oil futures slipped to Rs 2,866 per barrel on June 10 as participants increased their short positions. Oil prices retreated after hitting $40/bbl levels as market players assess the possibility of recovery in US crude production and uneven economic recovery.
The American Petroleum Institute (API) reported that US crude inventories rose by 8.42 million barrels for the week ended June 5.
Sunilkumar Katke, Head of Commodities and Currency, Axis Securities, said ahead of data on US crude oil inventories scheduled for June 10, prices have opened flat and stayed in a range around Rs 2,880 per barrel. "OPEC+ decision to extend the output cut till July-end supported prices. However, demand concerns due to the pandemic over a period of time may discount the output cut and keep prices under pressure."
Tapan Patel, Senior Analyst (Commodities), HDFC Securities, said oil prices traded down on fears of supply glut after Saudi Arabia and other OPEC nations opted out from the voluntary output cuts post July.
Expectations of a rise in weekly inventories also pressured oil prices to trade down on June 10.
In the futures market, crude oil for June delivery touched an intraday high of Rs 2,902 and an intraday low of Rs 2,861 per barrel on the Multi Commodity Exchange (MCX). So far in the current series, black gold has touched a low of Rs 1,361 and a high of Rs 4,415.
Crude oil futures for June delivery slipped Rs 22, or 0.76 percent, to Rs 2,866 per barrel at 14:40 hours IST on a business turnover of 6,193 lots.
The same for July delivery was down Rs 22, or 0.75 percent, to Rs 2,898 per barrel on a business volume of 305 lots.
The value of June and July contracts traded so far is Rs 1,035.45 crore and Rs 6.91 crore, respectively.
Katke expects WTI to trade near $35 again in a week’s time and hence suggest a selling MCX crude oil futures around Rs 2,900 with a stop loss around Rs 2,950 and a target of Rs 2,800 for the day.
West Texas Intermediate crude declined 2.47 percent at $37.98 per barrel, while Brent crude, the London-based international benchmark, was down 2.06 percent to $40.33 per barrel.
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