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Crude Oil Futures Up 2.04% To Rs 2,948, WTI Trades Above $40 A Barrel

Crude prices are supported by the gains in the US equity markets amid general optimism about a stimulus

Oct 13, 2020 / 04:35 PM IST

Crude oil futures rose to Rs 2,948 per barrel on October 13 as participants increased their long positions as seen by the open interest.

Crude oil prices tracked positive China September trade data as global economy reopened negating concerns about supply starting from the Gulf of Mexico, Norway, and Libya.

Crude prices are supported by the gains in the US equity markets amid general optimism about US stimulus even as policymakers struggled to make much headway in talks.

The International Energy Agency (IEA) said in its newly released annual World Energy Outlook that in its median scenario a vaccine and therapeutics could mean the global economy rebounds in 2021 and energy demand recovers by 2023. 

Market participants are awaiting OPEC monthly report for future cues.

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West Texas Intermediate (WTI) crude was up 2.03 percent, quoting at $40.23 per barrel, while Brent crude, the London-based international benchmark, jumped 1.70 percent to $42.43 per barrel.

MCX iCOMDEX Crude Oil Index surged 71.35 points, or 2.11 percent, at 3,450.86 at 15:59.

“NYMEX crude trades a percent higher near $39.97/bbl trading in a range as support from hopes of change in the OPEC’s production policy stance is countered by improving supply situation amid rising Libyan output, easing storm concerns and end of a labour strike in Norway. Crude may remain under pressure on easing supply risks and persisting demand challenges," 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 2,953 and an intraday low of Rs 2,886 per barrel on the 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 gained Rs 59, or 2.04 percent, to Rs 2,948 per barrel at 16:01 hours IST with a business turnover of 3,768 lots.

Crude oil delivery for November edged higher Rs 55, or 1.88 percent, to Rs 2,982 per barrel with a business volume of 235 lots.

The value of October and November’s contracts traded so far is Rs 1,016.57 crore and Rs 4.74 crore, respectively.

Trading Strategies

Sriram Iyer, Senior Research Analyst at Reliance Securities

Oil prices recovered from the lows of the session on Tuesday afternoon trade in Asia taking support from robust China data, however, concerns about supply resumption in Norway, the US, the Gulf of Mexico and Libya kept upside capped.

China, the world's top crude oil importer, took in 11.8 million barrels per day (bpd) of oil in September, up 5.5 percent, from 11.18 million bpd in August and 17.5 percent from 10.04 million bpd in September last year, customs data showed on Tuesday. 

Stoking further worries about fuel demand, lockdown curbs were being tightened in Britain and the Czech Republic to battle rising cases of COVID-19, and French Prime Minister Jean Castex said he could not rule out local lockdowns.

Technically, NYMEX WTI Crude Oil has bounced back from $39.00 levels indicating upside move up to $41.30-$42.75 levels. Support holds at $39.30-$38.60 levels.

Domestic crude on MCX rebounds from the lows of the session and trades with small gains this Tuesday afternoon trade, tracking the recovery in the international prices. Technically, MCX Crude Oil October has bounced back from Rs 2,865 levels where it has started to trade above 21- Daily Moving Average which is placed at Rs 2,930 levels above which could see Rs 2,960-2,985 levels.

Tapan Patel, Senior Analyst (Commodities), HDFC Securities

Crude oil prices traded steady with NYMEX WTI Crude oil prices kept lower trading range below $40 on Tuesday. MCX Crude oil October futures were trading around half a percent up to Rs 2,905 by noon session.

Earlier, Crude oil prices declined on return of supply from the Gulf of Mexico post-Hurricane Delta and end of strike in Norway. Prices gained on US stimulus hopes after White house claimed that US senate will support President Donald Trump’s new proposed legislation.

We expect crude oil prices to trade sideways to up with support at $38 and resistance at $41. MCX Crude oil October has support at Rs 2,850, resistance at Rs 2,990.

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Sandeep Sinha
first published: Oct 13, 2020 04:35 pm

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