Crude oil futures slipped to Rs 1,413 per barrel on April 18 as participants increased their short positions. Oil prices declined after China GDP shrunk by 6.8 percent, the worst since 1976 as the country took extreme measures to contain the novel coronavirus, or COVID-19.
WTI crude futures hit a 21-years low at $18.05 in intraday trade.
In China, the world’s top energy consumer daily crude oil throughput in March dropped to a 15-month low, with state refiners carrying out deep output cuts as the coronavirus pandemic eats into demand, but there are some signs of greenshoots as the country begins to ease virus-related curbs, Reuters reported.
In the futures market, crude oil for April delivery touched an intraday high of Rs 1,590 and an intraday low of Rs 1,381 per barrel on MCX. So far in the current series, black gold has touched a low of Rs 1,381 and a high of Rs 4,186.
Crude oil delivery for April declined Rs 154, or 9.87 percent, to Rs 1,407 per barrel at 14:45 hours IST. The same for May delivery slipped Rs 121, or 5.75 percent, to Rs 1,985 per barrel.
The value of April and May contracts traded so far is Rs 2,005.96 crore and Rs 376.62 crore, respectively.
West Texas Intermediate crude slipped 8.25 percent to $18.23 per barrel, while Brent crude, the international benchmark declined 0.43 percent to $27.70 per barrel.
Speaking on the road ahead for the black gold, Sunilkumar Katke, Head - Commodities & Currency, Axis Securities, sees it continuing to move southward amid increasing US stockpiles and concerns over demand due to pandemic in the current and next quarter, even after OPEC+ cuts output.
He recommends a sell in MCX May Crude futures around Rs 2,050, with a stop loss at Rs 2,150 and target of Rs 1,650 in the near term.