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Oil prices rise marginally ahead of OPEC decision; WTI trades above $75 a barrel

Crude may remain choppy ahead of OPEC decision; however general bias remains positive as the cartel is expected to maintain gradual production hikes.

Mumbai / July 02, 2021 / 04:17 PM IST
Image: Reuters

Image: Reuters

Crude oil prices are remaining range-bound as delay in OPEC+ decision on output increase has caused some uncertainty amid the prospect of higher demand. The price is less than 1 percent away from a fresh 52-week high.

The energy commodity traded in a narrow range after a gap-up start tracking the subdued global trend.

On the MCX, crude oil delivery for July gained Rs 19, or 0.34 percent, to Rs 5,626 per barrel at 15:45 hours IST with a business turnover of 10,416 lots. The delivery for August jumped Rs 21, or 0.38 percent to Rs 5,582 per barrel with a business volume of 561 lots.

The value of July and August’s contracts traded so far is Rs 520.77 crore and Rs 13.50 crore, respectively.

West Texas Intermediate (WTI) crude slightly down 0.04 percent to $75.20 per barrel, while Brent crude, the London-based international benchmark, eased 0.07 percent to $75.79 per barrel.

Close

“NYMEX crude trades mixed near $75/bbl. Crude is range-bound as delay in OPEC+ decision on production has caused some uncertainty. Mixed economic data from major economies, increasing virus concerns, and firmer US dollar have also pressurised prices. However, supporting price is a delay in Iran’s nuclear talks and persisting strength in the US equity market. Crude may remain choppy ahead of OPEC decision; however general bias remains positive as OPEC is expected to maintain gradual production hikes,” said Ravindra Rao, CMT, EPAT, VP- Head Commodity Research at Kotak Securities.

However, worries over the increase in the highly contagious coronavirus Delta variant cases in major oil-consuming nations kept the markets cautious.

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 75.36, indicating an overbought level in the prices.

Trading Strategy

Tapan Patel- Senior Analyst (Commodities), HDFC Securities

Crude oil prices are expected to trade sideways to up for the day with resistance at $76 and support at $73.90 per barrel. MCX Crude oil July has support at Rs 5,540, and resistance at Rs 5,680.

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Sandeep Sinha

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