Crude oil prices surged above Rs 5,500 per barrel on rising demand, supply concerns and decline in US stockpiles. The oil price got support as OPEC plus nations struggled to meet new output quota in August and lower production from US producers post Hurricane disruption.
The energy commodity has traded in the green since morning, tracking the positive global trend. It has risen Rs 185 or 3.50 percent last week on the domestic bourse.
On the MCX, crude oil delivery for October climbed Rs 70, or 1.28 percent, to Rs 5,535 per barrel at 16:39 hours IST with a business turnover of 9,010 lots. The delivery for November edged higher Rs 59, or 1.08 percent to Rs 5,519 per barrel with a business volume of 443 lots.
The value of October and November’s contracts traded so far is Rs 902.69 crore and Rs 27.36 crore, respectively.
West Texas Intermediate (WTI) crude rose 1.23 percent to $74.89 per barrel, while Brent crude, the London-based international benchmark, gained 1.32 percent to $78.25 per barrel.
“Crude oil prices continued upside on supply crunch with output disruptions and higher demand. The OPEC plus nations are struggling to meet raised output quota due to maintenance work. The lower supply from the Gulf of Mexico has led to large weekly inventory drawdowns to respond to higher demand for oil to replace costly natural gas and coal”, said Tapan Patel- Senior Analyst (Commodities), HDFC Securities.
The number of rigs drilling crude oil in the US increased by 10 to 421 for the week to September 24, the highest since April 2020, said Baker Hughes in a weekly report.
The CFTC data showed that money managers decreased their net long positions by 10099 lots in last week.
Oil production in the Gulf of Mexico remained affected while US crude oil stocks slumped to the seventh straight week owing to damage to Gulf Coast refineries suffered from Hurricane Ida.
Technicals
The black gold has been trading higher than 5, 20, 50, 100, and 200 days' simple moving averages and exponential moving average on the daily chart. The momentum indicator Relative Strength Index (RSI) is at 67.46, which indicates bullish movement in the prices.
Trading Strategy
Tapan Patel- Senior Analyst (Commodities), HDFC Securities
Crude oil prices are expected to trade up for the day with resistance at $76 and support at $73 per barrel. MCX Crude oil October has support at Rs. 5460, resistance at Rs. 5580.
Anand Rathi Investment Services
MCX Crude oil may touch Rs 5,550/bbl on increased global risk appetite as People’s Bank of China injected a net 100 billion yuan into the financial system, adding to the net 320 billion yuan last week, the most since January.
Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited
MCX Crude oil futures traded with a positive bias above Rs 5,400 levels. The market has been trading with bullish momentum and has already rallied more than 70 points since the previous close. We may expect the prices to trade with bullish bias in the evening hours and trade near Rs 5,600 levels.
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