Crude oil (Source: Reuters)
Crude oil futures traded firm on expectation of a surge in near-term fuel demand from the oncoming US summer driving season. The oil price was supported by gains in equity markets, an increase in demand from the US and Europe and depleting US crude stockpiles.
On the MCX, crude oil delivery for June gained Rs 36, or 0.74 percent, to Rs 4,887 per barrel at 17:52 hours IST with a business turnover of 10,621 lots. While delivery for July climbed Rs 33, or 0.68 percent to Rs 4,887 per barrel with a business volume of 451 lots.
The value of June and July’s contracts traded so far is Rs 1,473.41 crore and Rs 17.01 crore, respectively.
West Texas Intermediate (WTI) crude rose 0.73 percent to $67.34 per barrel, while Brent crude, the London-based international benchmark jumped 0.58 percent to $69.60 per barrel.
“NYMEX crude trades modestly higher near $67.1/bbl. Crude oil has jumped to March highs amid a stable US equity market, bigger than expected decline in US crude oil and product stocks and positioning ahead of US summer driving season and OPEC review meeting. However, weighing on price is rising cases in Asia, China’s investigation into imports and the prospect of higher supply from Iran. Crude has rescaled $67/bbl however we do not expect a sustained rise amid demand concerns and the prospect of higher supply”, Ravindra Rao, CMT, EPAT, VP- Head Commodity Research at Kotak Securities.
Tapan Patel- Senior Analyst (Commodities), HDFC Securities said, “Crude oil prices traded higher on expectations of US fuel demand recovery. The higher summer demand driving season has supported oil prices to trade up. The weekly inventory draw and positive US economic data have offset higher supply concerns from Iran.”
The American Automobile Association expects as many as 37 million travellers to hit the road for the Memorial Day Holiday, up 60 percent from last year’s pandemic-suppressed number of 23 million.
The possibility of higher Iranian supply may also be a topic of discussion at next week’s OPEC+ meeting.
The black gold has been trading higher than 5, 20, 50, 100 and 200 days' simple moving averages and exponential moving average on a daily chart. The momentum indicator Relative Strength Index (RSI) is at 58.73, indicating positive movement in prices.
Crude oil prices are expected to trade sideways to higher for the day with resistance at $68 and support at $65 per barrel. MCX Crude oil June has support at Rs 4,790, resistance at Rs 4,950, said Patel.
Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited said, MCX June Crude oil rallied more than 80 points during the evening hours. Prices have already taken a dip till Rs 4,850 levels which may act as intraday support for them. We may expect the market to rise and trade above Rs 4,900 levels in the evening session.
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