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Crude oil prices near 52-week high ahead of EIA inventory report; WTI trades above $74 a barrel

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.

Mumbai / June 30, 2021 / 06:48 PM IST
Image: Reuters

Image: Reuters

Crude oil futures climbed more than a percent and a half on June 30 and are within striking distance of a fresh 52-week high on the MCX as US crude stockpiles fell last week and OPEC+ nations delayed producers meeting till Friday to resolve differences on output cuts.

The energy commodity extended gains to trade at day’s high in the evening session tracking a strong global trend.

On the MCX, crude oil delivery for July surged Rs 81, or 1.49 percent, to Rs 5,508 per barrel at 18:10 hours IST with a business turnover of 9,253 lots. The delivery for August rose Rs 77, or 1.43 percent to Rs 5,474 per barrel with a business volume of 496 lots.

The value of July and August’s contracts traded so far is Rs 1,150.72 crore and Rs 21.48 crore, respectively.

West Texas Intermediate (WTI) crude jumped 1.41 percent to $74.01 per barrel, while Brent crude, the London-based international benchmark, gained 1.23 percent to $75.19 per barrel.

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“NYMEX crude trades flat near $73/bbl having erased early gains. Crude traded higher earlier today as API weekly report noted another bigger-than-expected decline in US crude oil stocks. Also supporting crude is expectations that OPEC+ may raise output only gradually. However, weighing on price is rising virus concerns and mixed economic data from major economies. Crude may remain range-bound to positive ahead of the inventory report and OPEC meeting,” said Ravindra Rao, CMT, EPAT, VP- Head Commodity Research at Kotak Securities.

The American Petroleum Insitute (API) reported that US crude inventories fell by 8.153 million barrels for the week ended June 27.

Market players will take further cues from EIA weekly inventory report to be released later in the day.

OPEC Secretary-General Mohammad Barkindo said demand in 2021 is expected to grow by 6 million barrels per day.

Technicals

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 71.08, indicating bullish movement in prices.

Trading Strategy

Tapan Patel- Senior Analyst (Commodities), HDFC Securities

Crude oil prices traded up as OPEC plus nations delayed producers meeting till Friday to resolve differences on output cuts. Crude oil prices got support from weekly inventory drawdown as API data showed draw of 8.15 mb in last week.

Crude oil prices are expected to trade sideways to up for the day with resistance at $74.50 and support at $72 per barrel. MCX Crude oil July has support at Rs 5,350 and resistance at Rs 5,520.

Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited

MCX Crude oil prices rallied more than 100 points from lower levels. Prices have formed a resistance zone at Rs 5,470-5,510 and may sustain below them. We may expect a decline to Rs 5,430 levels in the evening session.

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