Crude oil futures eased to Rs 2,998 per barrel on July 7 as participants increased their short positions. The black gold pared morning gain on concerns of increasing coronavirus cases worldwide.
Tapan Patel, Senior Analyst (Commodities), HDFC Securities, said crude oil prices traded weak on concerns over demand growth on record virus cases. “The recent surge in COVID-19 infections has dampened the demand outlook. Crude oil investors and traders ignored positive service PMI numbers from the US on fear of imposing lockdown measures.”
Ravindra Rao, VP- Head Commodity Research at Kotak Securities, said “Crude has been stuck in a $40-$41/bbl range amid lack of clear cues. Supporting crude oil and other commodities is economic readings from major economies, which shows a pickup in economic activity. Crude may continue to witness choppy trade unless there is more clarity on effect of a rise in virus cases in the US and on OPEC’s production policy.”
Navneet Damani, VP Commodities Research, Motilal Oswal Financial Services, feels market optimism looks a bit overstretched as the fragile US economic rebound is at risk of being undone by the latest surge in new coronavirus infections.
In the futures market, crude oil for July delivery touched an intraday high of Rs 3,032 and an intraday low of Rs 2,994 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 3,153.
Crude oil futures for July delivery slipped Rs 37, or 1.22 percent, to Rs 3,006 per barrel at 15:08 hours IST on a business turnover of 5,254 lots.The same for August delivery edged lower by Rs 39, or 1.27 percent, to Rs 3,027 per barrel on a business volume of 128 lots.
The value of July and August contracts traded so far is Rs 1,061.87 crore and Rs 4.28 crore, respectively.Patel expects oil prices to trade sideways to down for the day with support at $39 and resistance at $42. “MCX July Crude Oil futures has support at Rs 2,970 with resistance at Rs 3,080.”
West Texas Intermediate crude slipped 1.21 percent at $40.14 per barrel, while Brent crude, the London-based international benchmark, was down 0.93 percent to $42.70 per barrel.