Crude oil futures slipped 1.39 percent to Rs 3,753 per barrel on January 30 as participants increased their long position as seen by the open interest. The fall was triggered by a rise in US inventories by 3.5 million barrels for the week-ended January 24 and fears that the increasing spread of coronavirus could have on global economic growth.
Fears of the virus impact on oil demand are increasing as major airlines cancelled or reduced direct flights to China and travel advisories issued by different governments led to drop in the number of passengers.
In the futures market, crude oil touched an intraday high of Rs 3,799 and an intraday low of Rs 3,751 per barrel on the MCX. For February, crude touched a low of Rs 3,735 and a high of Rs 4,663.
Crude oil delivery for February was down Rs 51, or 1.34 percent, to Rs 3,770 per barrel. The same for March slipped Rs 51, or 1.33 percent, to Rs 3,774 per barrel.
The value of the February and March contracts traded so far is Rs 3,350.13 crore and Rs 72.12 crore, respectively.
Crude oil price has given a negative break out from rising trend line channel, price is expected to trade negative. Sustaining below Rs 3,770 next leg of correction would drag price lower towards Rs 3,720-3,700 levels, according to Axis Securities.
On hourly chart, price has been trading below 60 EMA which is a negative sign for price. The relative strength index is trading at 32 indicating low momentum in price.
MCX Crude oil has immediate support at Rs 3,770-Rs 3,680 whereas resistance is at Rs 3,790-3,840. Bias remains sideway to negative for the day, according to Motilal Oswal. The broking firm advised its clients to sell on rise targeting support level of Rs 3,730-3680.
West Texas Intermediate crude eased 1.28 percent to $52.65 per barrel, while Brent crude, the international benchmark, was trending down 1.44 percent to $58.06 per barrel.