In the futures market, crude oil for September delivery touched an intraday high of Rs 2,896 and an intraday low of Rs 2,845 per barrel on MCX.
Crude oil futures jumped to Rs 2,884 per barrel on September 16 as participants increased their long position as seen by the open interest. Crude oil prices gained as Hurricane Sally disrupted US offshore oil production and sharp drawdown in US crude inventory.
The American Petroleum Insitute (API) reported that US crude inventories declined by 9.5 million barrels for the week ended September 11.
Navneet Damani, VP Commodities Research, Motilal Oswal Financial Services said, “The peak holiday driving season has ended in the US and the rush-hour traffic is still sparse with India, the third-biggest consumer, has seen transport fuel sales remaining below 20 percent below a year ago levels last month. Even in China, refineries bulk buying has slowed down, showing signs of concerns of stalling of demand recovery.”
Crude already reflects the market view that rebalancing is still some time away. Market talks revived an old concern after Global Times reported that China may gradually cut its holdings of US Treasury bonds, amid persistent tensions between the two economies. It’s just speculation but could weigh on the market’s mood at the beginning of the week.
For this week, OPEC has some serious messaging to do at JMC on 16th and markets will watch for some serious decisions taken by OPEC+ to bring the stability back in the markets. On the options front, the cost of bearish put options, which help traders profit when prices slide, was the most expensive on bullish calls since June. That suggests options traders are turning pessimistic about the market outlook.
Tapan Patel- Senior Analyst (Commodities), HDFC Securities said, “Crude oil prices rose on bullish weekly inventory report from API and production shut due to Hurricane Sally. The API report showed 9.51 mb of drawdown in its weekly inventory report. Prices got additional support as more than 25% of offshore oil and gas production is shut in the Gulf of Mexico.”
Echoing with Patel’s view, Ravindra Rao, VP-Head Commodity Research at Kotak Securities said the focus will be on the EIA inventory report. Crude may trade with a positive bias ahead of EIA inventory report as API report has fueled expectation of a sharp drop in stocks.
In the futures market, crude oil for September delivery touched an intraday high of Rs 2,896 and an intraday low of Rs 2,845 per barrel on MCX. So far in the current series, black gold has touched a low of Rs 2,672 and a high of Rs 3,285.
Crude oil delivery for September gained Rs 56, or 1.98 percent, to Rs 2,884 per barrel at 15:54 hours IST with a business turnover of 4,726 lots.
Crude oil delivery for October increased Rs 50, or 1.74 percent, to Rs 2,918 per barrel with a business volume of 261 lots.
The value of September and October’s contracts traded so far is Rs 662.48 crore and Rs 9.46 crore, respectively.
Patel expects oil prices to trade up for the day with MCX Crude oil September futures has support at Rs 2,810 with resistance at Rs 2,970.
West Texas Intermediate crude was up 2.40 percent at $39.20 per barrel, while Brent crude, the London-based international benchmark gained 2.17 percent to $41.41 per barrel.For all commodities-related news, click here