Crude oil futures edged lower to Rs 4,251 per barrel on February 11 as participants increased their short positions as seen by the open interest. Crude oil rally paused after rising for eight straight sessions on the MCX.
The US Energy Information Administration (EIA) reported that US crude inventories fell by 6.6 million barrels for the week ended February 5 against market expectation of 0.99 million barrels rise.
Crude oil has risen since November as governments started vaccination drive for COVID-19 while putting in the large stimulus package to boost economic activity and the world’s top producer kept a lid on supply.
Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited, said: “MCX Crude February is trading above Rs 4,250 and profit booking seen from the higher levels. Crude oil is expected to trade sideways to negative with resistance seen at Rs 4,320 levels.”
West Texas Intermediate crude was down 0.70 percent to $58.27 per barrel, while Brent crude, the London-based international benchmark, eased 0.75 percent to $61.01 per barrel.
MCX iCOMDEX Crude Oil Index inched lower 39.77 points, or 0.82 percent, at 4,829.35 at 15:55.
In the futures market, crude oil for February delivery touched an intraday high of Rs 4,262 and an intraday low of Rs 4,241 per barrel on MCX. So far in the current series, black gold has touched a low of Rs 3,486 and a high of Rs 4,293.
Crude oil delivery for February fell by Rs 34, or 0.79 percent, to Rs 4,251 per barrel at 15:55 hours IST with a business turnover of 4,887 lots.
Crude oil delivery for March declined by Rs 34, or 0.79 percent to Rs 4,259 per barrel with a business volume of 329 lots.
The value of February and March’scontracts traded so far is Rs 549.44 crore and Rs 4.47 crore, respectively.
Trading strategy
Tapan Patel- Senior Analyst (Commodities), HDFC Securities
Crude oil prices traded under pressure witnessing profit booking from key resistance levels. The bullish weekly inventory data and demand hopes failed to cheer oil prices. However, demand recovery hopes may keep downside limited in oil price for the day.
We expect crude oil prices to trade sideways to down with support at $57 and resistance at $60. MCX Crude oil February has support at Rs 4,190 and resistance at Rs 4,310.
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