Crude oil futures climbed for the fourth day to trade above Rs 5,000 per barrel for the first time since October 2018. The oil price jumped on a higher demand outlook from OPEC following strong US data.
The crude price extended gains to trade at day’s high after a gap-up start on firm global trend.
On the MCX, crude oil delivery for June gained Rs 62, or 1.25 percent, to Rs 5,005 per barrel at 16:07 hours IST with a business turnover of 10,727 lots. While delivery for July surged Rs 62, or 1.25 percent to Rs 5,014 per barrel with a business volume of 693 lots.
The value of June and July’s contracts traded so far is Rs 907.68 crore and Rs 22 crore, respectively.
West Texas Intermediate (WTI) crude edged higher 0.86 percent to $68.30 per barrel, while Brent crude, the London-based international benchmark rose 0.98 percent to $70.94 per barrel.
“NYMEX crude trades modestly higher near $68.4/bbl. Crude trades higher supported by OPEC’s decision to keep production policy unchanged, some upbeat manufacturing readings, expectations of another decline in US crude stocks and a strong start to US summer driving season. However, weighing on price is persisting virus risks, inflationary concerns and China’s crackdown on commodity prices and improving production interest in the US. Crude may trade higher amid positioning ahead of the inventory report,” Ravindra Rao, CMT, EPAT, VP- Head Commodity Research at Kotak Securities.
Tapan Patel- Senior Analyst (Commodities), HDFC Securities said, “Crude oil prices traded higher on higher demand outlook from OPEC following strong US data. The strong US manufacturing data improved demand outlook eyeing economic growth. The Organization of the Petroleum Exporting Countries (OPEC) and its allies, together called OPEC+, agreed on Tuesday to keep to their plan to gradually ease supply curbs through July.”
The OPEC+ stuck to its plan of monthly production increases until July and did not provide any hints about further moves until there’s clear evidence more crude is needed.
The International Energy Agency (IEA) forecast that global oil demand will jump roughly 5 million barrels a day between now and the end of the year.
According to GasBuddy data showed that US gasoline demand for Memorial Day soared 6.9 percent, the highest summer demand on a single day since 2019.
The black gold has been trading higher than 5, 20, 50, 100 and 200 days' simple moving averages and exponential moving average on a daily chart. The momentum indicator Relative Strength Index (RSI) is at 63.65, indicating bullish movement in prices.
Crude oil prices are expected to trade up for the day with resistance at $70 and support at $67 per barrel. MCX Crude oil June has support at Rs 4,890, resistance at Rs 5,040, said Patel.
Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited said, “WTI Crude has broken on the upside during the trading session on Tuesday and continue to see a lot of demand for crude oil going ahead. On the chart, it looks as if the WTI market is probably going to go looking towards the $70 level. Support for the crude oil is Rs 4,900 and resistance at Rs 5,025 level.”
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