Crude oil slips 1.62% to settle at Rs 3,159 per barrel, but gains 0.89% for the week

Crude oil futures edged lower to settle at Rs 3,159 per barrel on August 21 as participants increased short position as seen by the open interest. Crude oil prices ended the week with a gain of Rs 28, or 0.89 percent, for the week.

Crude prices declined on weak US job numbers, tepid growth in economic activity globally, renewed fear of coronavirus lockdowns and supply worries over the OPEC meeting. The rebound in the US dollar also put additional pressure on oil prices.

The number of rigs drilling crude oil in the US jumped by 11 to 183 rigs this week from 172 rigs last week, said Baker Hughes in a weekly report. The rig count has risen for the first time since January.

Abhishek Bansal, founder chairman, Abans Group, said Crude oil demand will be affected due to an uptick in virus infections in Europe. France, Spain, and Austria are reporting the highest COVID-19 infection rates in several months.

Negative trend in crude is also supported by a drop in US oil inventory, less than market expectations. US oil inventories, last week, fell by only 1.632 million barrels, which was less than expectations of a decline of -2.85 million barrels.

Crude oil prices may trade negatively, following supply worries from OPEC+ members, and weakness in the world economy due to the coronavirus pandemic. It may find strong support around the 20-days EMA at $41.93, and the 50-days EMA at $39.14; meanwhile key resistance levels could be seen around $43.44 and $44.85 levels, said Bansal.

In the futures market, crude oil for September delivery touched an intraday high of Rs 3,229, and an intraday low of Rs 3,116 per barrel on MCX. So far in the current series, black gold has touched a low of Rs 2,943 and a high of Rs 3,285.

Crude oil delivery for September slipped Rs 52, or 1.62 percent, to settle at Rs 3,159 per barrel with a business turnover of 1,678 lots. While, crude delivery for October dropped by Rs 50, or 1.54 percent, to close at Rs 3,195 per barrel with a business volume of 11 lots.

The value of September and October’s contracts traded yesterday was Rs 2,386.80 crore and Rs 1.50 crore, respectively.

West Texas Intermediate crude fell 1.21 percent at $42.30 per barrel, while Brent crude, the London-based international benchmark was down 1.34 percent to $44.30 per barrel.