Crude oil futures were slightly lower at Rs 4,592 per barrel on March 1 as participants increased their long positions as seen by the open interest. Crude oil had gained 7.12 percent last week on the MCX.
The number of rigs drilling crude oil in the US rose by 4 to 309 rigs for the week to February 26, said Baker Hughes in a weekly report.
“Crude oil prices rallied for the fourth consecutive month as traders and investors weighed supply scenario as snow storm halted refinery operations and oil production in main US oil producing region. The US oil production fell by 10 percent while exports were down by 40 percent due to cold freeze. The OPEC plus nations may consider an option to ease some output cuts with the recent rally in the prices," said Tapan Patel- Senior Analyst (Commodities), HDFC Securities.
The black gold has been trading higher than 5, 20, 50, 100 and 200 days' moving averages on the daily chart. The Relative Strength Index (RSI) is at 76.64 which indicates positive momentum in prices.
“NYMEX crude trades about 1.7 percent higher near $62.55 per barrel. Crude oil recovered along with other commodities as progress on US stimulus pressurised the US dollar and helped equity markets stabilise. However, weighing on price is disappointing Chinese economic data and rise in US crude rig count to May 2020 highs. Crude oil has turned volatile along with financial markets and we may see volatile trade continuing ahead of the OPEC and allies meeting," said Ravindra Rao, VP- Head Commodity Research at Kotak Securities.
West Texas Intermediate (WTI) crude was up 1.30 percent to $62.30 per barrel, while Brent crude, the London-based international benchmark gained 1.24 percent to $65.22 per barrel.
MCX iCOMDEX Crude Oil Index dropped 11.32 points, or 0.22 percent, at 5,197.75 at 16:18.
In the futures market, crude oil for March delivery touched an intraday high of Rs 4,625 and an intraday low of Rs 4,587 per barrel on the 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 12, or 0.26 percent, to Rs 4,592 per barrel at 16:21 hours IST with a business turnover of 5,153 lots.
Crude oil delivery for April eased Rs 11, or 0.24 percent, to Rs 4,608 per barrel with a business volume of 145 lots.
The value of March and April’s contracts traded so far is Rs 581.47 crore and Rs 3.92 crore, respectively.
Trading strategy
Tapan Patel- Senior Analyst (Commodities), HDFC Securities
Crude oil prices resumed uptrend on Monday on demand growth optimism over US stimulus hopes and US approving third COVID vaccine. Crude oil prices capped upside near the resistance level of $64/65 amid speculation over output boost from OPEC plus nations in the upcoming meeting.
We expect crude oil prices to trade sideways to up with support at $62 and resistance at $65. MCX Crude oil March has support at Rs 4,570, resistance at Rs 4,670.
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