Crude oil futures declined to Rs 3,000 per barrel on July 13 as participants increased their short positions on concerns that rising coronavirus cases in the US and other parts of the world could impact demand.
Saudi Aramco cut its August loading shipment of medium and heavy grade crude to Asian buyers, Reuters reported.
Participants will keep an eye on OPEC's Joint Ministerial Monitoring Committee (JMMC) meet starting on July 14 where there are expectations for ease in supply cuts, which has lent support to prices.
Tapan Patel, Senior Analyst (Commodities), HDFC Securities, said investors and traders are speculating over expectations of ease in supply cut quotas. "OPEC and Russia are expected to ease their supply cuts to 7.7 million barrels per day against the current level of 9.7 million barrels per day as global oil demand has recovered."
Ravindra Rao, VP-Head Commodity Research at Kotak Securities, said crude oil may continue to witness choppy trade as virus risks and OPEC’s production policy is assessed, but the general bias may be on the downside owing to increasing demand concerns.
In the futures market, crude oil for July delivery touched an intraday high of Rs 3,034 and an intraday low of Rs 2,988 per barrel on the Multi-Commodity Exchange (MCX). So far in the current series, black gold has touched a low of Rs 1,655 and a high of Rs 3,153.
Crude oil futures for July delivery slipped Rs 46, or 1.51 percent, to Rs 2,997 per barrel at 15:06 hours IST on a business turnover of 3,972 lots. The same for August delivery lower by Rs 57, or 1.85 percent, to Rs 3,020 per barrel on a business volume of 124 lots.
The value of July and August's contracts traded so far is Rs 748.75 crore and Rs 3.29 crore, respectively.
Patel expects oil prices to trade down for the day with support at $37 and resistance at $41. "MCX July Crude Oil futures has support at Rs 2,860 with resistance at Rs 3,080."
West Texas Intermediate crude slipped 1.55 percent to $39.92 per barrel, while Brent crude, the London-based international benchmark, was down 1.20 percent to $42.72 per barrel.
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