Crude oil futures slip 0.43%, WTI trades below $40 a barrel

Crude oil futures declined to Rs 3,030 per barrel on June 22 as participants increased their short positions. Black gold took a breather after a gain of 9 percent last week on rising coronavirus cases worldwide.

The number of rigs drilling crude oil in the US decreased 10 to 180 last week, the lowest since June 2019.

India’s crude oil import for May fell 22.6 percent from a year earlier due to lower fuel demand.

Tapan Patel, Senior Analyst (Commodities), HDFC Securities, said crude oil prices witnessed selling pressure as the rise in coronavirus cases in Beijing, the US and South America, raising concerns over a recovery in fuel demand.

The World Health Organisation (WHO) reported a record number of cases on June 21, which outweighed the supply cut effect of OPEC+ nations.

In the futures market, crude oil for July delivery touched an intraday high of Rs 3,065 and an intraday low of Rs 2,992 per barrel on the Multi-Commodity Exchange (MCX). So far in the current series, black gold has touched a low of Rs 1,655 and a high of Rs 3,108.

Crude oil futures for July delivery eased Rs 13, or 0.43 percent, to Rs 3,038 per barrel at 15:39 hours IST on a business turnover of 5,059 lots.

The same for August delivery slipped Rs 14, or 0.45 percent, to Rs 3,068 per barrel on a business volume of 56 lots.

The value of July and August's contracts traded so far is Rs 1,566.95 crore and Rs 7.44 crore, respectively.

Patel expects oil prices to trade sideways to down for the day with support at $38 and resistance at $42. "MCX July Crude Oil futures has support at Rs 2,950 with resistance at Rs 3,090."

West Texas Intermediate crude gained marginally 0.03 percent at $39.84 per barrel, while Brent crude, the London-based international benchmark, was up 0.19 percent to $42.27 per barrel.