Crude oil futures flat at Rs 4,668/barrel on stronger dollar; Brent trades below $68 a barrel


Crude oil futures were steady at Rs 4,668 per barrel on March 18 as participants increased their long positions as seen by the open interest. Crude oil was pressured by a rise in US crude stockpiles, surging coronavirus cases and a stronger dollar.

The energy commodity traded flat after a flat to gap-down start in the afternoon session.

The black gold has been trading higher than 20, 50, 100 and 200 days’ moving averages but lower than the 5-day moving average on the daily chart. The momentum indicator Relative Strength Index (RSI) is at 58.78 indicating positive momentum in prices.

The US Energy Information Administration (EIA) reported that US crude oil inventories jumped by 2.39 million barrels for the week ended March 12.

West Texas Intermediate crude was down 0.43 percent to $ 64.31 per barrel, while Brent crude, the London-based international benchmark fell 0.43 percent to $ 67.71 per barrel.

“NYMEX crude trades 0.87% lower near $ 64.05/bbl. Weighing on crude price is mixed US EIA inventory report and IEA’s stance that demand may not hit pre-virus levels until 2023. However, supporting price is the weakness in the US dollar and gains in the equity market after the US Fed decision and its upbeat growth outlook for the US economy. Mixed factors may keep crude oil choppy however rising US crude stocks and IEA’s global market outlook may keep the pressure on prices”, said Ravindra Rao, VP- Head Commodity Research at Kotak Securities

MCX iCOMDEX Crude Oil Index was marginally higher 4.50 points, or 0.09 percent, at 5,279.92 at 15:50.

In the futures market, crude oil for March delivery touched an intraday high of Rs 4,676 and an intraday low of Rs 4,632 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 4,967.

Crude oil delivery for March gained Rs 4, or 0.09 percent, to Rs 4,668 per barrel at 15:51 hours IST with a business turnover of 4,019 lots. 

Crude oil delivery for April soared Rs 4, or 0.04 percent to Rs 4,698 per barrel with a business volume of 1,137 lots.

The value of March and April’s contracts traded so far is Rs 696.43 crore and Rs 93.77 crore, respectively.

Trading Strategy

Tapan Patel- Senior Analyst (Commodities), HDFC Securities

Crude oil prices declined for the fifth consecutive day with a rise in official weekly inventory data. The EIA reported an inventory build of 2.4 mb against forecast of 1 mb decline. The stalled vaccinations in European nations and rising virus cases has raised concerns over fuel demand recovery for crude oil.

Crude oil prices are expected to trade sideways to down for the day with resistance at $ 66 and support at $ 63.50 per barrel. MCX Crude oil March has support at Rs 4,590, resistance at Rs 4,710.

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