Crude oil futures recouped earlier losses to trade firm on June 10 after EIA data showed a surge in gasoline inventory due to weak summer fuel demand. Crude oil price is only 0.62 percent away from the 52-week high it touched yesterday as WTI bounced back above the $70 barrel mark owing to recovery in US economy from COVID-19.
The crude price traded in the positive territory at day’s high after a gap-down start, tracking a slightly firm global trend.
On the MCX, crude oil delivery for June rose Rs 28, or 0.55 percent, to Rs 5,118 per barrel at 15:54 hours IST with a business turnover of 10,291 lots. The delivery for July climbed Rs 27, or 0.53 percent to Rs 5,121 per barrel with a business volume of 1,115 lots.
The value of June and July’s contracts traded so far is Rs 606.71 crore and Rs 26.00 crore, respectively.
West Texas Intermediate (WTI) crude modestly climbed up 0.17 percent to $70.08 per barrel, while Brent crude, the London-based international benchmark, gained 0.24 percent to $72.39 per barrel.
“NYMEX crude trades has recovered from early losses to trade marginally higher near $70/bbl. Earlier Crude oil retreated from Oct.2018 highs amid mixed inventory report which noted a sharp drop in US crude oil stocks but also a sharp rise in gasoline stocks. Also weighing on crude is choppiness in the equity market and concerns about Chinese demand amid mixed data and efforts to curb rising raw material prices. Crude oil's sharp rise in last few days has made it vulnerable to profit-taking, however, a sharp fall is unlikely given the drop in US crude oil stocks,” said Ravindra Rao, CMT, EPAT, VP- Head Commodity Research at Kotak Securities.
Tapan Patel- Senior Analyst (Commodities), HDFC Securities said, “Crude oil prices traded under pressure on demand worries from US summer driving season with rise in product inventories. US gasoline inventories rose by more than 7 mb for a second weekly gain while weekly crude oil inventories fell by 5.2 mb. Investors are also eyeing on development from Iran nuclear talks.”
The US Energy Information Administration (EIA) reported that US crude oil inventories declined by 5.2 million barrels to 474 million barrels for the week ended June 4.
Market participants focused their attention on US CPI data and ECB meeting that could indicate how soon the policymakers will begin to withdraw support as COVID subsides.
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 67.31, indicating upbeat movement in prices.
Crude oil prices are expected to trade sideways to up for the day with resistance at $72 and support at $68 per barrel. MCX Crude oil June has support at Rs 5,060, resistance at Rs 5,180, said Patel.
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