Crude oil futures edged lower to Rs 2,741 per barrel on September 11 as participants increased their short positions. Prices fell after US government data showed a build-up in inventories indicating that markets are not going to see draws that investors are so bullish about.
The US Energy Information Administration (EIA) reported that US crude inventories rose by 2 million barrels for the week-ended September 4.
“Weighing on the crude price is the unexpected rise in US crude oil stocks, weakness in the US equity market, mixed US economic data and expectations of a bigger surplus this year,” said Ravindra Rao, VP-Head Commodity Research at Kotak Securities.
He expects crude prices to remain under pressure unless there is a sustained recovery in the US equity market.
Tapan Patel, Senior Analyst (Commodities), HDFC Securities, too sees the downside in the black gold continuing on lower demand concerns and fears of a supply overhang.
In the futures market, crude oil for September delivery touched an intraday high of Rs 2,753 and a low of Rs 2,718 per barrel on the Multi-Commodity Exchange (MCX). So far in the current series, the commodity has touched a low of Rs 2,672 and a high of Rs 3,285.
Crude oil futures for September delivery slipped Rs 24, or 0.87 percent, to Rs 2,741 per barrel at 15:18 hours IST on a business turnover of 4,253 lots.
The same for October delivery inched lower by Rs 20, or 0.71 percent, to Rs 2,784 per barrel on a business volume of 203 lots.
The value of September and October’s contracts traded so far is Rs 529.98 crore and Rs 5.22 crore, respectively.
Patel expects oil prices to trade sideways to down for the day with support and resistance for September Crude Oil futures at Rs 2,670 and Rs 2,790, respectively.
West Texas Intermediate crude fell marginally (0.08 percent) at $37.27 per barrel, while Brent crude, the London-based international benchmark, slipped 0.32 percent to $39.93 per barrel.