Crude oil futures edged higher to Rs 4,404 per barrel on February 17 as participants increased their long positions as seen by the open interest. Crude oil jumped as deep freeze in the US South shuts wells and oil refineries in Texas.
Crude oil prices were supported by increased geopolitical tension in the Middle East and its impact on supply.
The black gold is likely to take further cues from the American Petroleum Insitute (API) weekly inventory report scheduled to be released later in the day.
“NYMEX crude trades about 0.5 percent higher near $60.3/bbl. Earlier in the day crude came under pressure amid easing supply concerns relating to Norway and recovery in the US dollar index. However, supporting price is severe cold weather in the US, EIA forecast of lower US production next month, increased Middle-east tensions and improvement in virus situation. The general momentum for crude is positive; however, some correction is likely amid easing concerns about Norway supply,” said Ravindra Rao, VP- Head Commodity Research at Kotak Securities.
West Texas Intermediate crude was up 0.70 percent to $60.47 per barrel, while Brent crude, the London-based international benchmark, rose 0.92 percent to $63.93 per barrel.
MCX iCOMDEX Crude Oil Index inched higher by 43.66 points, or 0.88 percent, at 5,002.55 at 15:49.
In the futures market, crude oil for February delivery touched an intraday high of Rs 4,415 and an intraday low of Rs 4,372 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 4,424.
Crude oil delivery for February gained Rs 40, or 0.92 percent, to Rs 4,404 per barrel at 15:50 hours IST with a business turnover of 3,890 lots.
Crude oil delivery for March climbed by Rs 39, or 0.89 percent to Rs 4,421 per barrel with a business volume of 645 lots.
The value of February and March’s contracts traded so far is Rs 629.54 crore and Rs 20.10 crore, respectively.
Trading strategy
Tapan Patel- Senior Analyst (Commodities), HDFC Securities
Crude oil prices traded up on hopes of fuel demand recovery and lower supply expectations due to the cold snap in Texas. The upside remained capped with dollar recovery keeping prices with marginal gains.
We expect crude oil prices to trade higher with support at $59 and resistance at $62. MCX Crude Oil February has support at Rs 4,340 and resistance at Rs 4,450.
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