Crude oil futures drop 2.19% to Rs 4,426 per barrel on sharp rise in US inventories
In the futures market, crude oil for March delivery touched an intraday high of Rs 4,529 and an intraday low of Rs 4,424 per barrel on MCX.
Mumbai / March 04, 2021 / 16:26 IST
Crude oil futures tumbled to Rs 4,426 per barrel on March 4 as participants increased their short positions as seen by the open interest. The energy commodity fell ahead of OPEC and allies meet today and on a sharp rise in US crude stockpile.Crude oil extended fall in the afternoon session after a gap-down open on weak global cues. The black gold has been trading higher than 20, 50, 100 and 200 days' moving averages but lower than 5-day moving average on the daily chart. The Relative Strength Index (RSI) is at 59.59 which indicates positive momentum in prices.The US Energy Information Administration (EIA) reported that US crude oil inventories rose by 21.6 million barrels per day to 484.6 million barrels for the week ended February 26, the lowest since January 2018 as cold weather engulfed key production regions like Texas.“NYMEX crude trades fell in the early session and was trading near $60.97/bbl. Crude oil is steady ahead of OPEC+ meeting today. Reuters’ reports have indicated that OPEC+ may keep production stable as against general market expectations of an increase in output. However, weighing on crude price is EIA weekly inventory report, mixed US economic data and weakness in equity market. Crude may remain steady ahead of OPEC meeting however any production hike by OPEC coupled with negative US EIA inventory report may result in some correction”, said Ravindra Rao, VP- Head Commodity Research at Kotak Securities.West Texas Intermediate crude dropped 1.01 percent to $60.66 per barrel, while Brent crude, the London-based international benchmark lowered 0.86 percent to $63.52 per barrel.MCX iCOMDEX Crude Oil Index decreased 110.87 points, or 2.17 percent, at 5,008.81 at 15:58 hours.In the futures market, crude oil for March delivery touched an intraday high of Rs 4,529 and an intraday low of Rs 4,424 per barrel on MCX. So far in the current series, black gold has touched a low of Rs 3,800 and a high of Rs 4,674.Crude oil delivery for March slipped Rs 99, or 2.19 percent, to Rs 4,426 per barrel at 15:59 hours IST with a business turnover of 4,250 lots. Crude oil delivery for April declined by Rs 93, or 2.05 percent to Rs 4,444 per barrel with a business volume of 232 lots.The value of March and April’s contracts traded so far is Rs 1,055.54 crore and Rs 7.17 crore, respectively.Trading StrategyTapan Patel- Senior Analyst (Commodities), HDFC SecuritiesCrude oil prices rebounded on speculation that OPEC plus nations may rollover the output cut quota to next month without any change. Crude oil prices ignored large weekly inventory build with OPEC meeting speculations.We expect crude oil prices to trade sideways to higher with support at $60 and resistance at $63. MCX Crude oil March has support at Rs 4,450, resistance at Rs 4,570.For all commodities-related news, click here
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