Crude oil futures continued upward march and were just 0.4 percent away from fresh 2021 high on strong demand outlook and fading prospects of Iranian supply. The oil price extended gains and trades at day’s high on firm global trends.
On the MCX, crude oil delivery for June rose Rs 44, or 0.85 percent, to Rs 5,235 per barrel at 16:17 hours IST with a business turnover of 9,001 lots. The delivery for July surged Rs 39, or 0.75 percent to Rs 5,222 per barrel with a business volume of 2,068 lots.
The value of June and July’s contracts traded so far is Rs 729.36 crore and Rs 89.92 crore, respectively.
West Texas Intermediate (WTI) crude climbed 0.83 percent to $71.47 per barrel, while Brent crude, the London-based international benchmark, gained 0.89 percent to $73.51 per barrel.
“NYMEX crude trades mixed near $71 per barrel. Crude trades near October 2018 highs on demand optimism and as market players play down the possibility of an Iran deal. However, weighing on price is the forecast of higher US output, persisting virus concerns and China’s crackdown on commodities,” said Ravindra Rao, CMT, EPAT, VP- Head Commodity Research at Kotak Securities.
Prathamesh Mallya, AVP- Research, Non-Agri Commodities and Currencies, Angel Broking Ltd said, “Expectation of a paced revival in major economies following the increase in vaccination rates pointed towards a promising outlook for the global oil market.”
Amid other factors, crude is also affected by volatility in equity markets as market players position for Fed’s monetary policy decision.
The oil price has been rising amid hopes of higher demand in the US and Europe during summer, and improving virus situation. The upbeat forecast from OPEC and International Energy Agency for global demand supported the price.
The black gold has been trading higher than 5, 20, 50, 100 and 200 days' simple moving averages and exponential moving averages on a daily chart. The momentum indicator Relative Strength Index (RSI) is at 71.37, indicating positive movement in prices.
Tapan Patel- Senior Analyst (Commodities), HDFC Securities
Crude oil prices continued upside on strong demand outlook and fading prospects of Iran supply. The recent indirect discussion paved no way for the deal with intense discussions. Crude oil prices rose on fuel demand recovery hopes from the US, China and Europe with resumed vehicle and air traffic.
Crude oil prices are expected to trade up for the day with resistance at $74 and support at $70 per barrel. MCX Crude oil June has support at Rs 5,150 and resistance at Rs 5,280.
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