Crude oil prices traded modestly higher on supply interruption in the Gulf of Mexico as tropical storm Ida is likely to hit the Gulf Coast this weekend. However, improving supply in Mexico, rising coronavirus cases, and mixed economic data from the US and China weighed on the price.
The energy commodity traded in the green after a gap-up start, tracking the firm overseas trend.
On the MCX, crude oil delivery for September rose Rs 9, or 0.18 percent, to Rs 5,053 per barrel at 16:16 hours IST with a business turnover of 5,210 lots. The delivery for October increased Rs 5, or 0.10 percent to Rs 5,049 per barrel with a business volume of 291 lots.
The value of September and October’s contracts traded so far is Rs 891.92 crore and Rs 17.62 crore, respectively.
West Texas Intermediate (WTI) crude surged 1.65 percent to $68.53 per barrel, while Brent crude, the London-based international benchmark, gained 1.44 percent to $71.19 per barrel.
“NYMEX crude trades higher near $68.5/bbl supported by storm concerns in the Atlantic, a decline in US crude oil stocks and pick up in US gasoline demand. However, weighing on price is improving supply from Mexico, the mixed US, and Chinese economic data, and persisting virus risks. Crude may witness choppy trade amid mixed factors but storm concerns may keep prices supported”, 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, “Oil prices might find some support as worries over a potential hurricane heading the Gulf of Mexico ignited near term supply concerns. However, looming worries over widespread of the Delta variant of the Covid-19 virus might weigh on oil prices.”
The Organisation of the Petroleum Exporting Countries (OPEC) meets on September 1 to decide its policy amid a call from the US to add more barrels to the market to help the global economic recovery.
The second-quarter US GDP estimate was revised up from 6.5 percent to 6.6 percent against the expectation of 6.7 percent growth.
The black gold has been trading higher than 5, 20, and 200 days' moving averages but lower than the 50 and 100 days’ moving averages on the daily chart. The momentum indicator Relative Strength Index (RSI) is at 48.85, which indicates neutral movement in the prices.
Tapan Patel- Senior Analyst (Commodities), HDFC Securities
Crude oil prices gained on possible supply disruption in the Gulf of Mexico as Tropical Storm Ida is nearing the key producing region. The energy companies have begun shutting production in the Gulf of Mexico ahead of a potential hurricane forecast to hit on the weekend.
Crude oil prices are expected to trade sideways to higher for the day with resistance at $72 and support at $67 per barrel. MCX Crude oil September has support at Rs 4,980, resistance at Rs 5,180.
Sriram Iyer, Senior Research Analyst, Reliance Securities
Technically, WTI crude oil is above the $67.50 level could see a bullish momentum up to $68.40-$69.10 levels. Support is at $67.40-$66.70 levels.
On the domestic front, MCX Crude Oil September above Rs 5,000 could see Rs 5,060-Rs 5,120 levels. Support is at Rs 5,030-Rs 4,980 levels.
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