Crude oil futures edged lower to close at Rs 3,551 per barrel on December 24 as participants trimmed their positions as seen by the open interest. Crude oil prices gained as the UK clinches Brexit deal with the EU but rising COVID-19 cases and restriction imposed by some nations capped the upside.
Crude oil ended the week with a loss of Rs 42 or 1.67 percent for the week. Crude prices declined 3 out of the four trading sessions on the MCX.
Russian Deputy Prime Minister Alexander Novak yesterday said that his country supports OPEC+ increasing oil production by 500,000 barrels per day from February at January summit after the group agreed to cut output to support the global oil market as the COVID-19 pandemic has reduced fuel demand, Reuters reported.
The US Energy Information Administration (EIA) reported that US crude inventories dropped by 562,000 barrels for the week ended December 18 to 499.5 million barrels.
The number of rigs drilling crude oil in the US rose by 1 to 264 rigs for the week to December 23, said Baker Hughes in a weekly report. The rigs count rose for the fifth consecutive week.
Sunand Subramaniam, Senior Research Associate, Choice Broking said, “For the week ahead, we are expecting Global and MCX Crude prices to witness uptrend with fall in US crude inventories along with decline in American stockpiles. Moreover, vaccine optimism could support prices from the major downside movement. The Brexit deal has improved the sentiment in the market. However, extreme bullishness can be capped as we are in the Christmas and New Year Eve where global markets are closed. Overall, we continue to be moderately bullish in global oil prices in the week ahead.”
“Crude oil prices traded under pressure on worries over fuel demand recovery as spreading of a new strain of coronavirus raised fears of more lockdowns. The UK and other countries have imposed travel restrictions which triggered selling in oil prices combined with stalled economy. The delay in US stimulus package supported dollar to trade higher pushing crude oil prices lower”, said Tapan Patel- Senior Analyst (Commodities), HDFC Securities.
MCX iCOMDEX Crude Oil Index inched lower 13.68 points, or 0.34 percent, to close at 4,052.63.
In the futures market, crude oil for January delivery touched an intraday high of Rs 3,590 and an intraday low of Rs 3,506 per barrel on MCX. So far in the current series, black gold has touched a low of Rs 3,130 and a high of Rs 3,639.
Crude oil delivery for January slipped Rs 50, or 1.40 percent, to end at Rs 3,551 per barrel with a business turnover of 922 lots.
The value of January’s contracts traded on December 24 was Rs 705.90 crore.
Patel expects crude oil prices to trade sideways to down in coming week over mixed global cues and New Year holidays. Crude oil prices are currently holding the resistance range of $48-$50 per barrel. The breakout may lead crude oil price towards $53 per barrel with support at $46 per barrel. MCX Crude oil January contract has important support at Rs 3,360 and resistance at Rs 3,680 per barrel.
West Texas Intermediate crude rose 0.37 percent to settle at $48.30 per barrel, while Brent crude, the London-based international benchmark jumped 0.25 percent to end at $51.37 per barrel.
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