Crude oil prices traded higher on July 13 on concerns of tighter supply as market players await clarity on OPEC output quota and expectation of drawdown in US weekly inventory. The market players also positioned ahead of IEA monthly report today and OPEC monthly report on Thursday.
The energy commodity traded in the green after a gap-up start tracking the positive global trend.
On the MCX, crude oil delivery for July jumped Rs 41, or 0.75 percent, to Rs 5,539 per barrel at 16:26 hours IST with a business turnover of 5,837 lots. The delivery for August gained Rs 38, or 0.69 percent to Rs 5,511 per barrel with a business volume of 1,019 lots.
The value of July and August’s contracts traded so far is Rs 510.75 crore and Rs 69.40 crore, respectively.
West Texas Intermediate (WTI) crude was up 0.18 percent to $74.23 per barrel, while Brent crude, the London-based international benchmark, rose 0.31 percent to $75.39 per barrel.
“NYMEX crude trades in a range above $74.50/bbl. Crude is range bound as market players await more clarity on OPEC’s production policy and are positioning for the weekly inventory report. Amid other factors, support from firmer equities, delay in Iran talks and lower US crude stocks is countered by rising virus cases, concerns about Chinese demand and signs of rising US output. Crude may remain range bound amid OPEC uncertainty and ahead of inventory report but prospect of higher supply and demand concerns may keep pressure on prices,” said Ravindra Rao, CMT, EPAT, VP- Head Commodity Research at Kotak Securities.
However, weighing on the price is new mobility curbs introduced in parts of Japan, South Korea and Vietnam to restrict the spread of the Delta variant.
“India's oil demand is recovering as the COVID situation in the country has improved. Although high fuel prices could slow its recovery somewhat, we expect oil prices to ease in the coming months as summer driving demand starts to wane, and with the likely return of Iranian barrels and higher US supply to weigh on balances," said Lim Jit Yang, adviser for Asia-Pacific oil markets at S&P Global Platts Analytics.
The black gold has been trading higher than 5, 20, 50, 100 and 200 days' simple moving averages and exponential moving averages on the daily chart. The momentum indicator Relative Strength Index (RSI) is at 56.51, which indicates upbeat movement in the prices.
Tapan Patel- Senior Analyst (Commodities), HDFC Securities
Crude oil prices traded up on lower supply concerns with expectations of a drawdown in weekly US inventories and OPEC disagreement over output quota. Crude stockpiles have declined steadily for several weeks, with U.S. inventories falling to the lowest since February 2020 in the week to July 2.
Crude oil prices are expected to trade up for the day with resistance at $76 and support at $73 per barrel. MCX Crude oil July has support at Rs 5,480, resistance at Rs 5,620.
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