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Crude oil futures declined to Rs 3,150 per barrel on August 6 as participants increased their short positions. Prices retreated marginally after rising for the fourth straight day on demand concerns despite a weaker dollar and bigger drawdown in US crude inventories.
The US Energy Information Agency (EIA) reported that US crude inventories declined by 7.4 million barrels for the week-ended July 21.
Tapan Patel- Senior Analyst (Commodities), HDFC Securities said, “The slower economic recovery and expectation of higher supply from OPEC+ nations has limited the upside in oil prices. Earlier, crude oil prices traded higher on bullish inventory data and a weaker dollar.”
“NYMEX crude trades marginally lower below $42 per barrel as prospects of higher supply from OPEC and the US is capping gains. A weak dollar and firmness in equity markets is supporting the bulls at lower levels. Crude may witness choppy trade amid mixed factors, however the bias may be on the downside due to supply pressures,” Ravindra Rao, VP- Head Commodity Research at Kotak Securities.
In the futures market, crude oil for August delivery touched an intraday high of Rs 3,185 and a low of Rs 3,122 per barrel on the Multi-Commodity Exchange (MCX). So far in the current series, black gold has touched a low of Rs 2,520 and a high of Rs 3,263.
Crude oil futures for August delivery slipped Rs 11, or 0.35 percent, to Rs 3,150 per barrel at 15:25 hours IST on a business turnover of 3,816 lots. The same for September delivery edged lower by Rs 12, or 0.38 percent, to Rs 3,184 per barrel on a business volume of 110 lots.
The value of August and September’s contracts traded so far is Rs 1,193.54 crore and Rs 3.86 crore, respectively. Patel expects oil prices to trade sideways to down for the day with support at $40 and resistance at $43. “MCX Crude oil August futures has support at Rs 3,120 with resistance at Rs 3,230.”
West Texas Intermediate crude slipped 0.55 percent at $41.96 per barrel, while Brent crude, the London-based international benchmark, was down 0.07 percent to $45.20 per barrel.