Crude oil prices fell on August 26 on fuel demand concerns due to the rapid spread of the Delta variant of coronavirus across the globe. However, the crude downside was capped due to a sharp drawdown in US inventories and partial restoration of Mexican production after a fatal offshore platform fire.
The energy commodity traded in the red after a gap-down start, tracking tepid global cues.
On the MCX, crude oil delivery for September tumbled Rs 24, or 0.47 percent, to Rs 5,033 per barrel at 16:53 hours IST with a business turnover of 5,604 lots. The delivery for October dropped Rs 22, or 0.44 percent to Rs 5,035 per barrel with a business volume of 225 lots.
The value of September and October’s contracts traded so far is Rs 753.11 crore and Rs 10.52 crore, respectively.
West Texas Intermediate (WTI) crude declined 0.80 percent to $67.81 per barrel, while Brent crude, the London-based international benchmark, slipped 0.69 percent to $70.79 per barrel.
Prathamesh Mallya, AVP Research Non-Agri Commodities and Currencies, Angel Broking Ltd said, “Oil prices surged earlier in the week following bets over a revival in global demand. The approval to the Pfizer Inc/BioNTech SE COVID-19 vaccine by US drug regulator supported market sentiments.”
“However, demand woes for oil persist as escalating worries over the widespread of the delta variant led to increased restrictions across borders affecting global supplies,” he said.
The US Energy Information Administration (EIA) reported that US crude oil inventories decreased by 2.979 million barrels per day against the expectation of 2.683 Mbpd declines for the week ended August 20. Gasoline stocks fell by 2.24 million barrels, the Department of Energy said against expectations for a 1.5 million drop.
The black gold has been trading higher than 5 and 200 days' moving averages but lower than the 20, 50 and 100 days’ moving averages on the daily chart. The momentum indicator Relative Strength Index (RSI) is at 48.22, which indicates sideways movement in the prices.
Tapan Patel- Senior Analyst (Commodities), HDFC Securities
Crude oil prices traded weak on renewed COVID worries. Crude oil prices may cap downside with a drawdown in weekly inventories as the US EIA data showed crude inventories fell by 3 million barrels for the week ended August 20.
Crude oil prices are expected to trade sideways to up for the day with resistance at $69 and support at $65 per barrel. MCX Crude oil September has support at Rs 4,950 and resistance at Rs 5,090.
Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited
MCX Crude Oil future has been trading with marginal negative bias since morning and we may expect the prices to cover the losses and close in green during the evening session. We may witness market to trade near psychological levels of Rs 5,100 during the evening session.
For all commodities-related news, click hereDisclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.