Crude oil futures dip 0.44%, Brent slips below $30 per barrel

Crude oil futures eased to Rs 1,829 per barrel on May 11 as participants increased their short positions. Oil prices declined on concerns over the persistent glut and economic gloom caused by the coronavirus pandemic.

The number of rigs drilling crude oil decreased by 33 to 292 rigs last week, the lowest since September 2009.

Halliburton one of the biggest oil service providers to the energy sector laid off 1,000 employees last week.

Fuel consumption in India declined 46 percent in April as all petroleum products, except LPG, saw massive demand erosion following the nationwide lockdown that paused economic activity and travel.

Crude oil prices traded firm on May 11 after Saudi Arabia raised its official crude oil selling prices. Decline in dollar index and positive equity indices lent support.

Investors and traders are weighing oversupply worries as storage spaces are filling fast globally. Output cut from OPEC+ nations and reopening of lockdown in several nations may limit the downside in oil prices.

The lesser-than-expected rise in weekly oil inventories and output cut from major producers have supported oil prices. CFTC data shows that speculative long positions in crude oil rose by 16,520 during the previous week.

May crude oil futures on the Multi Commodity Exchange (MCX) gained by more than 2 percent to Rs 1,846 in afternoon trade.

In the futures market, crude oil for May delivery touched an intraday high of Rs 1,889 and an intraday low of Rs 1,805 per barrel on the MCX. So far in the current series, black gold has touched a low of Rs 796 and a high of Rs 3,905.

Crude oil futures for May delivery slipped Rs 8, or 0.44 percent, to Rs 1,829 per barrel at 15:06 hours IST on a business turnover of 7,472 lots. The same for June delivery eased Rs 15, or 0.76 percent, to Rs 1,950 per barrel on a business volume of 995 lots.

The value of May and June contracts traded so far is Rs 1,002.27 crore and Rs 17.08 crore, respectively.

Tapan Patel, Senior Analyst (Commodities), HDFC Securities, expect oil prices to face resistance near $27 and support at $22 per barrel. In the May series, he sees support for crude oil futures at Rs 1,700 with resistance at Rs 1,950 levels.

West Texas Intermediate crude declined 3.35 percent at $23.91 per barrel, while Brent crude, the London-based international benchmark, eased 3.42 percent to $29.91 per barrel.