Crude oil futures up marginally at Rs 3,537 per barrel in afternoon trade

Crude oil futures edged higher to Rs 3,537 per barrel on December 17 after a gap up opening on a drawdown in US stockpiles and optimism of coronavirus relief package in the US.

The US Energy Information Administration (EIA) reported that US crude inventories declined by 3.1 million barrels for the week ended December 11.

“NYMEX crude trades higher near $48.30/bbl supported by the weakness in US Dollar. Crude also remains supported by EIA inventory report which noted a 3.135 million barrels decline in US crude stocks, vaccine progress, and stimulus expectations. However, rising virus cases, mixed economic data and downbeat demand forecasts might trigger some profit booking at higher levels,” said Ravindra Rao, VP- Head Commodity Research at Kotak Securities.

West Texas Intermediate crude soared 0.56 percent quoting at $48.09 per barrel, while Brent crude, the London-based international benchmark jumped 0.47 percent to $51.32 per barrel.

MCX iCOMDEX Crude Oil Index inched higher 29.65 points, or 0.73 percent, at 4,072.01 at 15:40.

In the futures market, crude oil for December delivery touched an intraday high of Rs 3,571 and an intraday low of Rs 3,542 per barrel on MCX. So far in the current series, black gold has touched a low of Rs 2,594 and a high of Rs 3,571.

Crude oil delivery for December gained Rs 17, or 0.48 percent, to Rs 3,537 per barrel at 15:42 hours IST with a business turnover of 1,433 lots.

Crude oil delivery for January rose Rs 26, or 0.73 percent, to Rs 3,571 per barrel with a business volume of 238 lots.

The value of December and January’s contracts traded so far is Rs 203.22 crore and Rs 11.88 crore, respectively.

Trading strategy

Tapan Patel- Senior Analyst (Commodities), HDFC Securities

Crude oil prices gained after US data showed a larger than expected inventory draw. Crude oil prices also traded higher on fuel demand recovery hopes on US relief package expectations despite stricter lockdown measures in Europe and the US.

We expect crude oil prices to trade up with support at $47 and resistance at $50. MCX Crude oil December has support at Rs 3,490, resistance at Rs 3,610.

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