Crude oil futures slip 0.46% to Rs 4,349 per barrel on profit booking

Crude oil futures eased to Rs 4,349 per barrel on February 16 as participants increased their short positions. Crude oil slipped as traders booked profit at a higher level after a steep rally in the last few sessions.

Crude oil prices rallied in recent weeks on tightening supply due to production cut by OPEC, extremely cold weather conditions in the US impacting production, and potential supply disruption due to strike in Norway’s largest oil loading terminal.

“NYMEX crude trades mildly higher near 59.61/bbl as price retreated from a higher level. Market players are focusing on wage negotiations in Norway which will decide whether a strike happens or not at the Mongstad refinery. Amid other factors, crude is supported by severe cold weather in the US and increased tensions in the Middle East. Mixed economic data and rise in US crude oil rig count are however weighing on price. Crude has rallied sharply, and while overall momentum is positive, we may see some profit-taking if supply concerns in Norway improve and once US weather normalises”, said Ravindra Rao, VP- Head Commodity Research, at Kotak Securities.

West Texas Intermediate crude was up 0.47 percent to $59.75 per barrel, while Brent crude, the London-based international benchmark fell 0.35 percent to $63.08 per barrel.

MCX iCOMDEX Crude Oil Index inched 22.72 points lower, or 0.46 percent, at 4,941.85 at 15:53.

In the futures market, crude oil for February delivery touched an intraday high of Rs 4,387 and an intraday low of Rs 4,333 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 declined by Rs 20, or 0.46 percent, to Rs 4,349 per barrel at 15:54 hours IST with a business turnover of 3,837 lots. 

Crude oil delivery for March dropped by Rs 17, or 0.39 percent to Rs 4,367 per barrel with a business volume of 505 lots.

The value of February and March’scontracts traded so far is Rs 609.76 crore and Rs 16.59 crore, respectively.

Trading strategy

Tapan Patel- Senior Analyst (Commodities), HDFC Securities

Crude oil prices gained on lower supply expectations as production was halted in Texas, the main producing region of the US, due to cold weather. The tensions in the Middle East also supported prices.

We expect crude oil prices to trade higher with support at $59 and resistance at $62. MCX Crude oil February has support at Rs 4,320 and resistance at Rs 4,410.

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