Crude oil futures dropped to Rs 2,921 per barrel on October 14 as participants increased their short positions, as seen by the open interest.
Oil prices traded lower as hopes faded for another round of US fiscal stimulus before the November election and a firm dollar kept the pressure on price.
The Organization of the Petroleum Exporting Countries (OPEC), in its monthly report, cut its global oil demand forecast as coronavirus cases continue to rise. It said that demand will grow by 6.54 million barrels per day (bpd) in 2021 to 96.84 million bpd, 80,000 bpd less than expected a month ago.
West Texas Intermediate (WTI) crude was up 0.87 percent quoting at $39.85 per barrel, while Brent crude, the London-based international benchmark, jumped 0.66 percent to $42.17 per barrel.
MCX iCOMDEX Crude Oil Index was down 43.28 points, or 1.25 percent, at 3,416.94 at 4:07 pm.
Tapan Patel, senior analyst (Commodities), HDFC Securities said, “Crude oil prices traded under pressure on fading US stimulus hopes, demand growth worries and surge in virus cases. The fear of lockdown measures in Europe has raised demand growth concerns in oil market. The stalled progress over US stimulus also added pressure on oil prices.”
“Crude is range-bound as support from higher Chinese imports, forecast of lower US crude production and expectations of a decline in US crude stocks is countered by rising virus cases, setback on vaccine front, a restart of production in the Gulf of Mexico and weaker demand forecast by International Energy Agency and OPEC. Mixed factors may keep crude bound in a range near $40/bbl however we maintain sell on rise view amid increasing demand concerns”, said Ravindra Rao, vice president and head, Commodity Research, at Kotak Securities.
In the futures market, crude oil for October delivery touched an intraday high of Rs 2,962 and an intraday low of Rs 2,918 per barrel on the MCX. So far in the current series, 'black gold' has touched a low of Rs 2,718 and a high of Rs 3,320.
Crude oil delivery for October slipped Rs 37, or 1.25 percent, to Rs 2,921 per barrel at 4:10 pm with a business turnover of 3,183 lots.
Crude oil delivery for November edged lower Rs 38, or 1.27 percent, to Rs 2,952 per barrel with a business volume of 225 lots.
The value of October and November’s contracts traded so far is Rs 803.39 crore and Rs 3.83 crore, respectively.
Patel expects crude oil prices to trade sideways to down with support at $38 and resistance at $41. MCX Crude oil October has support at Rs 2,850, resistance at Rs 2,990, he said.For all commodities related news, click here