Crude oil futures edged higher to Rs 3,858 per barrel on February 1 as participants increased their long position as seen by the open interest. The crude oil price had declined 0.39 percent last week on the MCX.
Crude oil prices extended gain after a gap up open in the evening session tracking positive global cues.
The number of rigs drilling crude oil in the US increased by 6 to 295 rigs for the week to January 29, said Baker Hughes in a weekly report. The rigs count rose for the 10 successive weeks.
“Crude Oil prices rose in starting of the week, but showed signs of exhaustion after the inventory data came. Data shows that demand is decreasing, but near $50 the support is coming due to supply cut from the Middle East countries. Frankly speaking, we are in the range bound market, so buy from the support and sell near resistance is a good strategy for the week," said Kshitij Purohit, Lead, Commodities and Currency at CapitalVia Global Research Ltd.
He advised traders to buy MCX Crude Oil around Rs 3,780 – 3,760 levels with stop loss below Rs 3,720 and a target of Rs 3,920.
West Texas Intermediate (WTI) crude was up 0.92 percent to $52.68 per barrel, while Brent crude, the London-based international benchmark soared 1.25 percent to $55.71 per barrel.
MCX iCOMDEX Crude Oil Index inched higher 46.58 points, or 1.07 percent, at 4,387.32 at 17:08.
In the futures market, crude oil for February delivery touched an intraday high of Rs 3,858 and an intraday low of Rs 3,825 per barrel on the MCX. So far in the current series, black gold has touched a low of Rs 3,486 and a high of Rs 3,958.
Crude oil delivery for February gained Rs 38, or 0.99 percent, to Rs 3,858 per barrel at 17:09 hours IST with a business turnover of 4,138 lots.
Crude oil delivery for March jumped Rs 41, or 1.07 percent, to Rs 3,867 per barrel with a business volume of 44 lots.
The value of February and March’s contracts traded so far is Rs 854.62 crore and Rs 1.61 crore, respectively.
Tapan Patel- Senior Analyst (Commodities), HDFC Securities
Crude oil prices traded higher on demand optimism amid vaccine rollouts and lower supply concerns. The investment sentiments have improved huge scaled vaccination programmes which boosted hopes for fuel demand recovery. The voluntary supply cuts from Saudi Arabia has also landed support to oil prices.
We expect crude oil prices to trade sideways to up with support at $51.80 and resistance at $54. MCX Crude oil February has support at Rs 3,790, resistance at Rs 3,942.
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