Crude oil futures fell to Rs 3,206 per barrel on August 27 as participants increased their short positions. Prices slipped as the Indian rupee strengthened against the dollar.
The US Energy Information Administration (EIA) reported that US crude declined by 4.68 million barrels for the week ended August 21, the fifth week of drawdown.
Hurricane Laura has strengthened into category 4 and is headed towards Texas-Louisiana region forcing 84.3 percent of Gulf of Mexico crude production to shut as on August 27. The hurricane poses the region’s biggest storm threat since Hurricane Katrina in 2005, which caused a 90 percent shutdown.
“Crude continues to trade directionless as support from supply disruption in the Gulf of Mexico is countered by concerns about the economic impact of a major hurricane moving towards the US mainland. The decline in US crude stocks as reported by the US EIA report is providing support at lower levels. However, a marginal rise in US crude production might also cap the gains. Crude may continue to remain rangebound unless there is more clarity on the storm's impact,” Ravindra Rao, VP- Head Commodity Research at Kotak Securities, said.
Tapan Patel- Senior Analyst (Commodities), HDFC Securities said, “Lower demand on slower economic growth has kept upside limited in crude oil prices.” He expects oil prices to trade sideways to up for the day with support at $42 and resistance at $45. "MCX September Crude Oil futures has support at Rs 3,150 and resistance at Rs 3,270."
In the futures market, crude oil for September delivery touched an intraday high of Rs 3,234 and a low of Rs 3,197 per barrel on the Multi-Commodity Exchange (MCX). So far in the current series, black gold has touched a low of Rs 2,943 and a high of Rs 3,285.
Crude oil futures for September delivery slipped Rs 29, or 0.9 percent, to Rs 3,206 per barrel at 15:37 hours IST on a business turnover of 3,704 lots.
The same for October delivery declined Rs 29, or 0.89 percent, to Rs 3,237 per barrel on a business volume of 40 lots.
The value of September and October’s contracts traded so far is Rs 527.27 crore and Rs 1.84 crore, respectively.
West Texas Intermediate crude slipped 0.35 percent to $43.24 per barrel, while Brent crude, the London-based international benchmark, was down 0.15 percent to $46.09 per barrel.For all commodities related news, click here