Crude oil futures rose to Rs 3,106 per barrel on June 23 due to build-up of long positions. The black gold continued its uptrend with prices hitting its highest levels in three months.
The commodity is likely to take further cues from the American Petroleum Institute’s (API) weekly inventory report scheduled to be released later in the day.
Sunilkumar Katke, Head of Commodities and Currency at Axis Securities, said WTI crude oil prices have surged to a multi-month high of $41 per barrel after its unprecedented negative closing in April. "The rally is mainly a result of opening up of economies, including its largest consumer China followed by the agreement on extending production cut by OPEC and its allies from July as the current deadline expires by June-end."
The stimulus package by most central banks across the globe to revive the economy and drive manufacturing is also one of the major drivers of crude oil prices.
However, Navneet Damani, Vice President, Motilal Oswal, warned that the market is still worried about the US-China trade deal. “The old cliché that there's no smoke without fire will certainly be ringing in the ears of the bulls.”
In the futures market, crude oil for July delivery touched an intraday high of Rs 3,126 and an intraday low of Rs 3,061 per barrel on the Multi Commodity Exchange (MCX). So far in the current series, black gold has touched a low of Rs 1,655 and a high of Rs 3,126.
Crude oil futures for July delivery climbed Rs 52, or 1.7 percent, to Rs 3,116 per barrel at 15:00 hours IST on a business turnover of 4,987 lots.
The same for August delivery rose Rs 44, or 1.42 percent, to Rs 3,132 per barrel on a business volume of 65 lots.
The value of July and August contracts traded so far is Rs 1,244.61 crore and Rs 2.40 crore, respectively.
Katke expects crude oil prices to correct a bit from here. He advices traders to sell around Rs 3,150 per barrel with a stop loss at Rs 3,220 for a target of Rs 3,000 mark in coming days.
West Texas Intermediate crude gained 1.33 percent at $41.27 per barrel, while Brent crude, the London-based international benchmark, was up 1.30 percent to $43.64 per barrel.
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