MCX crude oil futures hits fresh high of Rs 4,424, Brent trades above $63 a barrel

Crude oil futures edged higher to Rs 4,403 per barrel on February 15 after hitting a fresh high of Rs 4,424 for February series during the intraday trade on the MCX. Crude oil strengthened on the expectations of US stimulus, output cut and escalation of fresh tensions in the Middle East.

Crude oil prices witnessed a strong recovery, thus resuming weekly winning streak thanks to demand growth optimism and lower supply fears. The fresh concerns over standoff between West and Iran boosted buying in crude oil prices keeping aside demand worries.

The number of rigs drilling crude oil in the US jumped by 7 to 306 rigs for the last week (February 12), said Baker Hughes in a weekly report.

Money managers raised their net long US crude futures and options positions by 29,566 contracts to 383,715 in the week to February, according to data from US CFTC.

“NYMEX crude trades higher near $60.6/bbl. Crude has surged to January 2020 highs on supply concerns amid a possible strike in Norway and increased tensions in the Middle-east. Also supporting price is severe cold weather in the US which has increased heating demand. Weighing on price is the rise in US rig count to May 2020 highs and lower Chinese travel activity prior to Lunar New year holidays. Crude may continue to trade higher however some of the positive factors are temporary in nature and could make crude vulnerable to profit taking in coming days”, said Ravindra Rao, VP- Head Commodity Research at Kotak Securities.

West Texas Intermediate crude was up 1.83 percent to $60.56 per barrel, while Brent crude, the London-based international benchmark rose 1.30 percent to $63.24 per barrel.

MCX iCOMDEX Crude Oil Index inched higher by 87.49 points, or 1.78 percent, at 5,002.07 at 16:13 hours IST.

In the futures market, crude oil for February delivery touched an intraday high of Rs 4,424 and an intraday low of Rs 4,389 per barrel on MCX. So far in the current series, black gold has touched a low of Rs 3,486 and a high of Rs 4,424.

Crude oil delivery for February soared Rs 79, or 1.83 percent, to Rs 4,404 per barrel at 16:14 hours IST with a business turnover of 4,238 lots. 

Crude oil delivery for March gained Rs 76, or 1.75 percent to Rs 4,411 per barrel with a business volume of 420 lots.

The value of February and March’s contracts traded so far is Rs 719.60 crore and Rs 14.83 crore, respectively.

Trading strategy

Tapan Patel- Senior Analyst (Commodities), HDFC Securities

Crude oil prices soared on Middle East tensions after the Saudi-led coalition fighting in Yemen said late on Sunday it intercepted and destroyed an explosive-laden drone fired by the Iran-aligned Houthi group toward the kingdom.

We expect crude oil prices to trade higher with support at $59 and resistance at $62. MCX Crude oil February has support at Rs 4,370, resistance at Rs 4,460.

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