Crude oil futures jump 0.54% to Rs 4,499 per barrel; Brent trades near $65


Crude oil futures rose to Rs 4,499 per barrel on February 24 as participants increased their long positions as seen from open interest. Crude oil prices gained on struggling US oil production and bullish estimate by investment banks that oil price would climb above $ 70 per barrel in the coming months.

The American Petroleum Insitute (API) reported that US crude inventories jumped by one million barrels to 469 million barrels for the week ended February 19.

The black gold has been trading higher than 5, 20, 50, 100 and 200 days’ moving averages on the daily chart. The Relative Strength Index (RSI) is at 74.9 which indicates positive momentum in prices.

“NYMEX crude trades about 0.5 percent lower near $ 61.3/bbl as API reported an unexpected 1.03 million barrels’ increase in US crude oil stocks. Also weighing on crude price are signs of recovery in US crude production. However, supporting the price is upbeat US economic data and Fed’s stance to continue with supportive measures. Crude may remain under pressure ahead of the inventory report; however, any signs of tightness in the US market may help price recover,” said Ravindra Rao, VP- Head Commodity Research at Kotak Securities.

West Texas Intermediate crude was up 0.42 percent to $ 61.93 per barrel, while Brent crude, the London-based international benchmark, soared 0.60 percent to $ 64.87 per barrel.

MCX iCOMDEX Crude Oil Index was up 22.63 points, or 0.45 percent, at 5,085.74 at 15:55.

In the futures market, crude oil for March delivery touched an intraday high of Rs 4,507 and an intraday low of Rs 4,427 per barrel on MCX. So far in the current series, black gold has touched a low of Rs 3,800 and a high of Rs 4,566.

Crude oil delivery for March jumped Rs 24, or 0.54 percent, to Rs 4,499 per barrel at 15:56 hours IST with a business turnover of 5,297 lots. 

Crude oil delivery for April gained Rs 29, or 0.65 percent to Rs 4,516 per barrel with a business volume of 104 lots.

The value of March and April’s contracts traded so far is Rs 1,006.25 crore and Rs 4.97 crore, respectively.

Trading strategy

Tapan Patel- Senior Analyst (Commodities), HDFC Securities

Crude oil prices declined on inventory build as the cold freeze has curbed demand from refiners. The US API data showed 1 mb increase in crude oil stockpiles against a forecast of 5.2 mb draw.

We expect crude oil prices to trade sideways to down with support at $ 60.50 and resistance at $ 63. MCX Crude oil March has support at Rs 4,390 and resistance at Rs 4,510.

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