Oil prices might be under pressure as bleak economic outlook reflecting the resurgence of COVID-19 virus undermined the outlook for Crude. On the MCX, oil prices are expected to trade lower today, said Gupta.
Crude oil futures traded weak at Rs 2,863 per barrel on September 30 as participants increased short positions as seen by the open interest. Crude oil prices fell on worries over the outlook for fuel demand as Europe and the US grappled with a surge in new coronavirus infections and on mixed API weekly report.
The American Petroleum Insitute (API) reported that US crude inventories declined by 0.83 million barrels but this draw was offset by huge build of 1.62 million barrels of gasoline inventories for the week ended September 25.
Anuj Gupta- DVP- Commodities and Currencies Research, Angel Broking Ltd said, "On Tuesday, WTI Crude prices ended lower by 3.23 percent to close at $39.3 per barrel while on MCX Crude oil prices corrected by 3.75 percent to Rs 2,877 levels as widening impact of the pandemic continued to weigh on the demand prospects for Crude. The resurgence of the COVID-19 virus is a major setback for the global oil market. An alarming increase in COVID-19 cases raised worries over the reinforcement of lockdown in major economies which undermined the outlook for Crude."
Moreover, rising exports from Libya and Iran despite the production cuts by the Organization of the Petroleum Exporting (OPEC) also weighed on the prices. However, hopes of further stimulus infusion by the US as the democrats and the white house officials work on striking a deal limited the fall in Crude prices.
Oil prices might be under pressure as bleak economic outlook reflecting the resurgence of COVID-19 virus undermined the outlook for Crude. On the MCX, oil prices are expected to trade lower today, he said.
"NYMEX crude trades modestly lower near $39/bbl amid mixed API report. API noted a 0.831 million barrels decline in US crude oil stocks but a rise in stocks at Cushing, the delivery terminal for NYMEX crude. API noted an unexpected rise in gasoline stocks but also a sharp decline in distillate stocks. Crude may remain under pressure ahead of inventory report however a sharp decline is unlikely owing to OPEC's willingness to do more and improving outlook for the Chinese economy", said Ravindra Rao, VP- Head Commodity Research at Kotak Securities.
In the futures market, crude oil for October delivery touched an intraday high of Rs 2,896 and an intraday low of Rs 2,855 per barrel on MCX. So far in the current series, black gold has touched a low of Rs 2,718 and a high of Rs 3,320.
Crude oil delivery for October slipped Rs 14, or 0.49 percent, to Rs 2,863 per barrel at 15:39 hours IST with a business turnover of 3,459 lots.
Crude oil delivery for November dropped Rs 12, or 0.41 percent, to Rs 2,910 per barrel with a business volume of 113 lots.
The value of October and November’s contracts traded so far is Rs 743.98 crore and Rs 1.89 crore, respectively.
Gupta expects as of today traders can go for sell in Crude oil at Rs 2,930 with the stop loss of Rs 3,010 and for the target of Rs 2,800. We expect WTI crude oil may test $36 levels soon.
West Texas Intermediate crude was down 1.22 percent at $38.81 per barrel, while Brent crude, the London-based international benchmark slipped 1.42 percent to $40.97 per barrel.For all commodities related news, click here