Crude oil futures edged higher to Rs 4,253 per barrel on February 9 after hitting a fresh high of Rs 4,278 for February series during intraday trade on the MCX. Crude oil jumped on hopes of further US economic stimulus and production cuts among key producers.
Crude oil managed to extend its upward momentum and tested the highest level since January 2020 on COVID vaccine progress and tighter global market on Saudi's voluntary production cut of a million barrels per day until March.
“NYMEX crude trades higher near $58.2/bbl supported by hopes of the tighter market as Saudi’s 1 million bpd production cuts and decline in US crude stocks may tighten supply while demand may improve with vaccine progress and US stimulus measures. Waning hopes that US may lift sanctions on Iran resulting in higher exports also supported prices. Crude may continue to trade higher ahead of weekly inventory report however the rally is overstretched and if inventory report disappoints we may see some correction,” said Ravindra Rao, VP- Head Commodity Research at Kotak Securities.
West Texas Intermediate crude was up 0.47 percent to $58.24 per barrel, while Brent crude, the London-based international benchmark soared 0.40 percent to $60.94 per barrel.
MCX iCOMDEX Crude Oil Index inched higher 22.73 points, or 0.47 percent, at 4,830.49 at 15:23.
In the futures market, crude oil for February delivery touched an intraday high of Rs 4,278 and an intraday low of Rs 4,237 per barrel on MCX. So far in the current series, black gold has touched a low of Rs 3,486 and a high of Rs 4,278.
Crude oil delivery for February rose Rs 22, or 0.52 percent, to Rs 4,253 per barrel at 15:24 hours IST with a business turnover of 4,692 lots.
Crude oil delivery for March jumped Rs 18, or 0.42 percent to Rs 4,260 per barrel with a business volume of 295 lots.
The value of February and March contracts traded so far is Rs 684.80 crore and Rs 9.04 crore, respectively.
Trading strategy
Tapan Patel- Senior Analyst (Commodities), HDFC Securities
Crude oil prices were boosted by lower supply concerns from major oil producers and demand recovery from stimulus hopes. The additional supply cuts from Saudi Arabia till March has achieved some of the target of balancing the oil market.
We expect crude oil prices to trade up with support at $57 and resistance at $60. MCX Crude oil February has support at Rs 4,190, resistance at Rs 4,320.
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