Crude oil rises on upbeat growth outlook, jumps 2.67% so far this week

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.

Crude oil futures edged higher on June 11 boosted by optimism over strong economic demand after US unemployment claims fell for the sixth straight week in an encouraging reaction to United States inflation data. The oil price is on track for a third successive week of gains and gained 2.67 percent so far this week at the domestic bourse.

The crude price extended gain in the afternoon session to trade at day’s high on firm global cues.

On the MCX, crude oil delivery for June jumped Rs 23, or 0.45 percent, to Rs 5,143 per barrel at 15:37 hours IST with a business turnover of 10,463 lots. The delivery for July surged Rs 20, or 0.39 percent to Rs 5,143 per barrel with a business volume of 1,237 lots.

The value of June and July’s contracts traded so far is Rs 513.65 crore and Rs 33.16 crore, respectively.

West Texas Intermediate (WTI) crude rose 0.18 percent to $70.42 per barrel, while Brent crude, the London-based international benchmark, gained 0.19 percent to $72.66 per barrel.

“NYMEX crude trades marginally higher near $70.40/bbl. Crude eased in the early sessions amid some profit-taking after a rally to Oct.2018 highs. Also weighing on price is a drop in US gasoline demand and the prospect of more supply from Iran. However, supporting price is a sharp drop in US crude stocks, OPEC’s upbeat growth outlook and choppy US dollar index. Crude oil continues to hold above $70/bbl indicating bullish sentiment; however, we recommend some caution owing to mixed factors,” said Ravindra Rao, CMT, EPAT, VP- Head Commodity Research at Kotak Securities.

The Organisation of the Petroleum Exporting Countries (OPEC) said oil demand would rise by 6.6 percent or 5.95 million barrels per day this year.

The US consumer prices jumped 5 percent on the year in May, the highest since May 2008, and well above market expectation of 4.7 percent growth.

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 68.33, indicating upbeat movement in prices.

Trading Strategy

Reliance Securities said MCX June Crude oil could trade on a positive note where Rs 5,080-5,100 levels hold supports and resistance is at Rs 5,155-Rs 5,180.

For all commodities-related news, click here

Disclaimer: 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.