Crude oil futures gain 0.67%, WTI trades near $40 a barrel

Crude oil futures jumped to Rs 3,016 per barrel on June 8 as participants increased their long position. Oil prices gained after OPEC+ on June 6 agreed to extend output deal to July end and upbeat US non-farm payrolls data boosted demand for crude.

The number of rigs drilling crude oil in the US decreased by 16 to 206 rigs last week, lowest since 2009.

Saudi Aramco has raised its official selling price (OSP) for crude to all destinations for July, according to Bloomberg.

Tapan Patel, Senior Analyst (Commodities), HDFC Securities, said crude oil prices extended gains on Monday and prices touched $40 after OPEC-plus nations agreed to extend oil output cuts till the end of July 2020. The record oil imports from China also supported prices to trade higher as oil imports from China rose to an all-time high of 11.3 million barrels per day in May.

The lockdown easing measures have improved fuel demand outlook, which has supported oil prices to trade higher in recent weeks. The extension of output cuts from OPEC plus nations will balance the oil market, further removing supply glut.

In the futures market, crude oil for June delivery touched an intraday high of Rs 3,046 and an intraday low of Rs 2,871 per barrel on MCX. So far in the current series, black gold has touched a low of Rs 1,361 and a high of Rs 4,415.

Crude oil delivery for June gained Rs 20, or 0.67 percent, to Rs 3,010 per barrel at 14:54 hours IST with a business turnover of 5,705 lots.

Crude oil delivery for July was up Rs 20, or 0.66 percent, to Rs 3,045 per barrel with a business volume of 262 lots.

The value of June and July contracts traded so far is Rs 1,176.89 crore and Rs 22.85 crore, respectively.

Patel expects oil prices to trade higher for the day with support at $38 and resistance at $43. MCX Crude oil June futures have support at Rs 2,930 with resistance at Rs 3,110.

West Texas Intermediate crude gained 0.63 percent at $39.80 per barrel, while Brent crude, the London-based international benchmark, was up 0.85 percent to $42.66 per barrel.

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