Crude oil futures tumbled to Rs 4,332 per barrel on March 23 as participants increased their short positions as seen by the open interest. Crude oil declined on worries over demand recovery as surging coronavirus cases forced nations to impose lockdown measures and travel restrictions to curb the virus spread.
The energy commodity extended decline in the afternoon trade after a gap-down start to trade at a low point of the day, tracking a sell-off in the global market and firm dollar.
The black gold has been trading higher than 50, 100 and 200 days' moving averages but lower than the 20 and 5 days’ moving average on the daily chart. The momentum indicator Relative Strength Index (RSI) is at 41.62 indicating bearish momentum in prices.
The US dollar index traded 0.44 percent higher at 92.14 on safe-haven demand and putting pressure on commodities at large.
The physical markets have come under pressure as refiners around the world, including China and the US begins maintenance activities, Reuters reported.
“Crude oil prices traded weak on worries over fuel demand recovery on pandemic worries. The slower vaccine rollouts and fear of lockdown measures in Europe weighed on crude oil prices. The travel restrictions in Europe and other countries is offsetting lower output from OPEC plus nations," said Tapan Patel- Senior Analyst (Commodities), HDFC Securities.
“Crude oil prices are expected to trade sideways to lower for the day with resistance at $62.50 and support at $59 per barrel. MCX Crude oil April has support at Rs 4,360, resistance at Rs 4,480”, he added.
MCX iCOMDEX Crude Oil Index slumped 159.59 points, or 3.17 percent, to 4,871.95 at 16:07 hours.
In the futures market, crude oil for April delivery touched an intraday high of Rs 4,447 and an intraday low of Rs 4,313 per barrel on MCX. So far in the current series, black gold has touched a low of Rs 4,102 and a high of Rs 4,985.
Crude oil delivery for April edged lower by Rs 146, or 3.26 percent, to Rs 4,331 per barrel at 16:09 hours IST with a business turnover of 5,931 lots.
Crude oil delivery for May slipped by Rs 138, or 3.07 percent to Rs 4,350 per barrel with a business volume of 154 lots.
The value of April and May’s contracts traded so far is Rs 1,750.48 crore and Rs 13.68 crore, respectively.
Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited said, “MCX Crude April is trading below Rs 4,500 levels and is not able to sustain above the Rs 4,650 level. IEA raised questions about some of the reasons regarding the hefty amount of spare production capacity, currently in the region of 8 million barrels/day that is being held back by OPEC+ members. Crude oil has support at Rs 4,300 levels and resistance at Rs 4,516."
West Texas Intermediate (WTI) crude was down 3.83 percent to $59.20 per barrel, while Brent crude, the London-based international benchmark declined 3.87 percent to $62.12 per barrel.
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