Crude oil futures jumped to Rs 3,012 per barrel on July 31 as participants increased their long positions tracking a weaker dollar after it declined 3.3 percent on July 30.
US GDP for the second quarter recorded a decline of 32.9 percent, the worst since the Second World War.
Tapan Patel, Senior Analyst (Commodities), HDFC Securities, said weak demand concerns and ample supplies has kept oil prices under pressure as OPEC+ nations will adhere to a new quota of output cut from August 1, which will collectively increase global oil output by 1.5 million barrels per day. "The weakness in the dollar index and strong manufacturing PMI data from China has supported crude oil prices to trade positively on July 31."
“The supply glut as indicated from the widening spread between near and far month contracts may cap the gains. We may see choppy trade continuing, but the general bias may be on the downside amid increasing demand concerns and the prospect of higher supply,” said Ravindra Rao, VP-Head Commodity Research at Kotak Securities.
In the futures market, crude oil for August delivery touched an intraday high of Rs 3,030 and a low of Rs 2,995 per barrel on the Multi-Commodity Exchange (MCX.) So far in the current series, the black gold has touched a low of Rs 2,520 and a high of Rs 3,182.
Crude oil futures for August delivery gained Rs 18, or 0.60 percent, to Rs 3,010 per barrel at 15:18 hours IST on a business turnover of 4,134 lots. The same for September delivery rose by Rs 13, or 0.43 percent, to Rs 3,042 per barrel on a business volume of 75 lots.
The value of August and September's contracts traded so far is Rs 730.55 crore and Rs 2.50 crore, respectively.
Patel expects oil prices to trade sideways to up for the day with support at $39 and resistance at $42. "MCX August Crude oil futures has support at Rs 2,940 and resistance at Rs 3,080."
West Texas Intermediate crude gained 0.58 percent at $40.15 per barrel, while Brent crude, the London-based international benchmark, was up 0.53 percent to $43.48 per barrel.For all commodities related news, click here