Crude oil futures climbed 6.47 percent this week to settle at Rs 4,722 per barrel on an upbeat demand forecast by OPEC and the International Energy Agency for 2021. Crude oil gained in three out of the five trading sessions on the MCX.
The 'black gold' has been trading higher than 5, 20, 50, 100 and 200 days' moving averages on the daily chart. The momentum indicator Relative Strength Index (RSI) is at 59.88, indicating bullish movement in prices.
The International Energy Agency and Organisation of Petroleum Exporting Countries raised their global oil demand growth forecasts for 2021 to 5.7 million barrels per day (bpd) and 5.95 million bpd respectively.
Crude oil was supported by economic recovery and stronger demand outlook in China and the US, rally in global equity markets countering the surging coronavirus cases in major consuming nations.
The US Energy Information Administration (EIA) reported that US crude oil inventories fell by 5.88 million barrels for the week ended April 9 against a forecast of 2.9 million barrels decline. However, gasoline inventories rose 309,000 barrels less than expectations against a 786,000-barrel rise.
The CFTC data showed that money managers increased their net long positions by 8,274 lots in the last week.
The number of rigs drilling crude oil in the US jumped by 7 to 344 rigs for the week to April 16, the highest since April 2020, said Baker Hughes in a weekly report.
“Crude oil prices traded higher during the week on higher demand prospectus amid signs of economic recovery in top oil-consuming nations. Crude oil prices rallied with a round of positive economic data from China and the US. Crude oil prices also got a boost from bullish weekly inventory data where oil inventories fell larger than expected. Crude oil prices rebounded sharply with dollar decline along with broad buying in commodities,” said Tapan Patel, Senior Analyst (Commodities), HDFC Securities.
Patel expects crude oil prices to trade sideways to up with resistance at $68 per barrel with support at $60 per barrel. MCX Crude oil April contract has important support at Rs 4,560 and resistance at Rs 4,850 per barrel.
West Texas Intermediate crude slipped 0.60 percent to settle at $63.08 per barrel, while Brent crude, the London-based international benchmark fell 0.34 percent to $66.71 per barrel.
MCX iCOMDEX Crude Oil Index eased 22.39 points, or 0.42 percent to close at 5,304.54.
In the futures market, crude oil for April delivery touched an intraday high of Rs 4,764 and an intraday low of Rs 4,680 per barrel on MCX. So far in the current series, black gold has touched a low of Rs 4,102 and a high of Rs 4,985.
Crude oil delivery for April dropped by Rs 20, or 0.42 percent, to end at Rs 4,722 per barrel with a business turnover of 1,906 lots.
Crude oil delivery for May declined by Rs 22, or 0.46 percent to Rs 4,736 per barrel with a business volume of 3,894 lots.
The value of April and May’s contracts traded on Friday was Rs 1,449.72 crore and Rs 1,005.55 crore, respectively.
Next Week Strategy
Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited
Strategy: For the next week, traders should make a buy position in the MCX Crude oil future. The ideal range to enter in any buy position should be around Rs 4,570-4,630, for the target price of Rs 4,880 and keeping a stop loss at Rs 4,500.
Rationale: The Crude oil Prices gave break out after strong signs of economic recovery in the United States and China, It showing a strong demand outlook strong weekly gain, prices are sustaining above 50 days SMA and RSI printing 59 on daily charts.
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