Crude oil futures up 1.53% to Rs 3,581, Brent trades above $52 a barrel

Crude oil futures soared to Rs 3,581 per barrel on January 4 as participants increased their long position as seen by the open interest. Crude oil price rose tracking weakness in the dollar and OPEC+ meeting on output increase today.

The commodity ended the last week with a loss of Rs 27 or 0.76 percent on the MCX.

OPEC Secretary-General Mohammad Barkindo said that the outlook for the first half is very mixed and there are still many downside risks to juggle.

The number of rigs drilling crude oil in the US rose by 3 to 267 rigs for the week to December 31, said Baker Hughes in a weekly report. The rigs count rose for the sixth consecutive week.

“NYMEX crude trades higher near $48.8/bbl. Crude is range-bound above $48/bbl as market players position for OPEC+ meeting on production policy. Support from weaker US dollar and vaccination progress is countered by US-China tensions and rising virus cases. Crude may remain choppy ahead of the OPEC meeting; however, if the producer group decided on further production hike next month we may see some profit-taking in crude prices”, said Ravindra Rao, VP- Head Commodity Research at Kotak Securities.

West Texas Intermediate crude was up 0.95 percent quoting at $48.98 per barrel, while Brent crude, the London-based international benchmark gained 1.41 percent to $52.53 per barrel.

MCX iCOMDEX Crude Oil Index inched higher 61.57 points, or 1.53 percent, at 4,083.41 at 16:41.

In the futures market, crude oil for January delivery touched an intraday high of Rs 3,643 and an intraday low of Rs 3,567 per barrel on MCX. So far in the current series, black gold has touched a low of Rs 3,130 and a high of Rs 3,643.

Crude oil delivery for January increased Rs 54, or 1.53 percent, to Rs 3,581 per barrel at 16:42 hours IST with a business turnover of 1,845 lots. 

Crude oil delivery for February gained Rs 82, or 2.30 percent, to Rs 3,640 per barrel with a business volume of 3 lots.

The value of January and February’s contracts traded so far is Rs 494.38 crore and Rs 0.14 crore, respectively.

Trading strategy

Tapan Patel- Senior Analyst (Commodities), HDFC Securities

Crude oil prices have held a steady range near the resistance levels of $50. The prices are supported by vaccine rollout optimism and expectations that OPEC plus nations may keep output quota unchanged when they meet today.

We expect crude oil prices to trade up with support at $48 and resistance at $51. MCX Crude oil January has support at Rs 3,530, resistance at Rs 3,670.

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