Crude oil futures extended gains and managed to regain some of its losses incurred in the previous session on reopening colonial pipeline in the United States amid surging coronavirus cases in India. Crude oil jumped tracking firm equity markets, dollar weakness and optimism about a recovery in demand.
On the MCX, Crude oil delivery for May soared Rs 98, or 2.10 percent, to Rs 4,770 per barrel at 21:12 hours IST with a business turnover of 4,183 lots. While delivery for June jumped Rs 93, or 1.98 percent to Rs 4,789 per barrel with a business volume of 4,055 lots.
The value of May and June’s contracts traded so far is Rs 2,335.51 crore and Rs 663.73 crore, respectively.
West Texas Intermediate crude gained 1.90 percent to $ 65.03 per barrel, while Brent crude, the London-based international benchmark surged 1.98 percent to $ 68.38 per barrel.
“NYMEX crude trades higher near $ 65/bbl. Although crude is trading higher today it might get pressurized by easing supply concerns relating to the US as Colonial Pipeline resumed operation after closing due to a cyber-attack. Also weighing on price would be mixed inventory report and concerns about rising virus cases in India. However, supporting price is IEA’s forecast of a tighter market and upbeat US data. Crude may remain under pressure amid improving US supply situation and persisting concerns about Indian demand”, Ravindra Rao, CMT, EPAT, VP- Head Commodity Research at Kotak Securities.
India’s largest oil marketing firm Indian Oil Corporation has started shopping for crude after a one-month hiatus, providing some optimism that demand has not stalled by rampant virus resurgence.
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 a daily chart. The momentum indicator Relative Strength Index (RSI) is at 53.58 indicating sideways movement in prices.
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Crude witnessing recovery may not persist until prices advance above Rs 4,788 region. But break above the same may be a sign of fresh buying.
MCX Crude is expected to trade sideways trend having support at Rs 4,660 level and resistance at Rs 4,780 level.
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