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Crude oil futures eased to Rs 2,893 per barrel on June 17 as participants increased their short positions.The American Petroleum Institute (API) reported that US crude inventories rose 3.85 million barrels for the week ended June 12 against expectations of a decline of 0.15 million barrels.
The market is likely to take further cue from US Energy Information weekly data to be released later in the day.
Tapan Patel, Senior Analyst (Commodities), HDFC Securities, said crude oil traded weak in the opening trade on June 17 on expectations of bearish weekly inventory data. “Prices have firmed up on improved demand outlook after the IEA raised the demand forecast for 2020 to 91.72 million barrels per day.”
Crude price may weaken further only if EIA reports an increase in stocks as reported by API. Apart from stocks, focus will also be on US crude production and refinery demand. US crude production is near October 2018 lows and is expected to fall further.
In the futures market, crude oil for June delivery touched an intraday high of Rs 2,954 and an intraday low of Rs 2,839 per barrel on the Multi-Commodity Exchange (MCX). So far in the current series, black gold has touched a low of Rs 1,361 and a high of Rs 4,415.
Crude oil futures for June delivery slipped Rs 44, or 1.50 percent, to Rs 2,886 per barrel at 18:40 hours IST on a business turnover of 4,602 lots.The same for July delivery declined Rs 36, or 1.22 percent, to Rs 2,922 per barrel on a business volume of 1,156 lots.
The value of June and July contracts traded so far is Rs 2,620.36 crore and Rs 89.01 crore, respectively.Patel expects oil prices to trade sideways with support at $37 and resistance at $40. “MCX June Crude Oil futures has support at Rs 2,800 and resistance at Rs 3,010.”
West Texas Intermediate crude slipped 1.12 percent to $37.95 per barrel, while Brent crude, the London-based international benchmark, was down 0.76 percent to $40.65 per barrel.