Crude oil futures gave up morning gains and turned choppy in the afternoon session on concerns of rising coronavirus cases in India. Crude oil opened firm on stronger fuel demand recovery in the United States and China and EIA report showed a higher drawdown in US crude stockpiles.
On the MCX, Crude oil delivery for May marginally gained Rs 8, or 0.17 percent, to Rs 4,834 per barrel at 15:58 hours IST with a business turnover of 7,067 lots. While delivery for June soared Rs 15, or 0.31 percent to Rs 4,856 per barrel with a business volume of 549 lots.
The value of May and June’s contracts traded so far is Rs 1,025.34 crore and Rs 21.70 crore, respectively.
West Texas Intermediate crude was slightly lower 0.29 percent to $65.44 per barrel, while Brent crude, the London-based international benchmark eased 0.22 percent to $68.81 per barrel.
“NYMEX crude trades lower near $65.3bbl. Crude oil has turned choppy amid mixed inventory report which noted a sharp drop in US crude stocks but an unexpected rise in gasoline stocks. Concerns about rising virus cases in India are countered by easing virus-related restrictions in US and some European countries. Mixed economic data is challenging the general upbeat outlook for the global economy. Crude has corrected after testing March highs and may see some extended losses as inventory report failed to surprise,” said Ravindra Rao, CMT, EPAT, VP- Head Commodity Research at Kotak Securities.
The US Energy Information Administration (EIA) reported that US crude oil inventories dropped by 8 million barrels for the week ended April 30 against a forecast of 2.3 million barrels decline.
India’s oil imports in March jumped by 7.3 percent to 18.6 million tonnes from February, buoyed by an upturn in economic activity, but are expected to drop again because of renewed lockdowns.
Also weighing on the price is prospect of higher supply from OPEC and Iran, increased volatility in financial markets and mixed economic data.
The black gold has been trading higher than 5, 20, 50, 100 and 200 days' moving averages on a daily chart. The momentum indicator Relative Strength Index (RSI) is at 61.23 indicating bullish movement in prices.
Tapan Patel- Senior Analyst (Commodities), HDFC Securities
Crude oil prices are fluctuating between pandemic worries and economic recovery raising demand hopes. Crude oil prices have capped downside on stronger fuel demand recovery from the US and China while the ease in lockdown measures in Europe has improved investment sentiments. The EIA report showed a large inventory draw of 7.99 million barrels in line with market expectations.
Crude oil prices are expected to trade sideways to up for the day with resistance at $67 and support at $64.50 per barrel. MCX Crude oil May has support at Rs 4,830, resistance at Rs 4,950.
For all commodities-related news, click hereDisclaimer: 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.