Crude oil prices traded modestly higher on tight supplies, growing demand and a sharp fall in the rupee. The oil prices were supported by a rapid increase in vaccination but the surge in the Delta variant capped the upside.
The energy commodity pared earlier losses and traded positive in the evening session after a flat-to-gap-down start.
On the MCX, crude oil delivery for August soared Rs 23, or 0.42 percent, to Rs 5,470 per barrel at 16:41 hours IST with a business turnover of 7,778 lots. The delivery for September jumped Rs 24, or 0.44 percent to Rs 5,437 per barrel with a business volume of 255 lots.
The value of August and September’s contracts traded so far is Rs 580.33 crore and Rs 7.59 crore, respectively.
West Texas Intermediate (WTI) crude dropped 0.23 percent to $73.45 per barrel, while Brent crude, the London-based international benchmark, slipped 0.21 percent to $74.95 per barrel.
“Crude oil prices traded off the recent highs heading for second weekly gains. The strong demand outlook despite OPEC output hike and lower inventory in the US has supported oil prices to retain the upper trading range above $70 per barrel. The rebound in major economies has helped underpin fuel consumption and drained stockpiles built up during the pandemic,” said Tapan Patel- Senior Analyst (Commodities), HDFC Securities.
“Crude oil prices are expected to trade sideways to up for the day with resistance at $75 and support at $72 per barrel. MCX crude oil August has support at Rs 5,380 and resistance at Rs 5,520,” Patel noted.
Data from information provider Genscape indicated that the inventories at the Cushing, Oklahoma storage hub have continued to draw. Cushing stockpiles were seen at 36.299 million barrels this week, down 360,917 barrels from July 23.
Technicals
The black gold has been trading higher than 5, 20, 50, 100 and 200 days' simple moving averages and exponential moving averages on the daily chart. The momentum indicator Relative Strength Index (RSI) is at 55.98, which suggests a buy in the prices.
Trading Strategy
Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited
MCX Crude oil prices traded with marginal positive momentum. The market is moving briskly on the positive side and traded above Rs 5,480 levels after more than two weeks. We may expect the prices to move with the same momentum in the coming sessions as well and test psychological levels of Rs 5,500.
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