Crude oil futures edged higher to settle at Rs 3,789 per barrel on January 8 as participants increased their long positions as seen by the open interest. Crude oil price kick-started the year with solid gains after Saudi Arabia unexpectedly pledged to cut additional production, rally in global equity markets, jump in treasury yields, and a sharp decline in US crude stockpiles.
It ended the week with a gain of Rs 262 or 7.42 percent to surge over a 10-month high. Crude prices rose in four out of the five trading sessions on the MCX.
The US Energy Information Administration (EIA) reported that US crude inventories fell by 8.01 million barrels for the week ended January 1.
The number of rigs drilling crude oil in the US increased by 8 to 275 rigs for the week to January 1, said Baker Hughes in a weekly report. The rigs count rose for the seventh straight week.
“Crude oil prices surged above $52 per barrel witnessing strong buying on-demand recovery hopes and lower supply expectations. The boost in the crude oil prices came after Saudi Arabia voluntarily pledged to cut oil output by 1 mb per day after OPEC plus nations left the oil output quota unchanged. Crude oil prices were supported by risk-on sentiments with strong equity indices and recovery in US bond yields. The vaccine rollouts in some parts of the world and beginning of the emergency use of a vaccine in the US boosted prospects of oil demand recovery”, said Tapan Patel- Senior Analyst (Commodities), HDFC Securities.
MCX iCOMDEX Crude Oil Index inched jumped 72.98 points, or 1.71 percent, to close at 4,335.42.
In the futures market, crude oil for January delivery touched an intraday high of Rs 3,808 and an intraday low of Rs 3,738 per barrel on MCX. So far in the current series, black gold has touched a low of Rs 3,130 and a high of Rs 3,808.
Crude oil delivery for January soared Rs 51, or 1.36 percent, to end at Rs 3,789 per barrel with a business turnover of 2,073 lots.
Crude oil delivery for February gained Rs 66, or 1.77 percent, to close at Rs 3,805 per barrel with a business volume of 16 lots.
The value of January and February’s contracts traded on January 8 was Rs 845.97 crore and Rs 0.60 crore, respectively.
Patel expects crude oil prices to trade with bullish bias in the coming week with support at $49 per barrel and resistance at $54 per barrel. MCX Crude oil January contract has important support at Rs 3,680 and resistance at Rs 3,940 per barrel.
West Texas Intermediate crude climbed 3.72 percent to settle at $52.75 per barrel, while Brent crude, the London-based international benchmark rose 3.44 percent to close at $56.25 per barrel.
For all commodities-related news, click here
Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.