Crude oil futures rose to Rs 2,940 per barrel on September 23 as participants increased their long position as seen by the open interest. Crude oil prices gained erasing early losses after API reported buildup in US weekly inventory.

The American Petroleum Insitute (API) reported that US crude inventories jumped by 0.69 million barrels for the week ended September 18.

Tapan Patel- Senior Analyst (Commodities), HDFC Securities said, “Crude oil prices declined after US API reported a rise in weekly inventories. The API data showed crude oil stockpiles rose by 0.69 mb last week against the forecast of a decline of 2.3 mb. The growing uncertainty over economic recovery amid surging virus cases has kept crude oil prices under pressure.”

“NYMEX crude trades moderately higher near $39.9/bbl. Weighing on crude price is API weekly report which noted a 0.691 million barrels increase in US crude oil stocks as against forecast of 2.3 mn bbl decline. Also weighing on price is firmness in the US dollar and prospect of stringent measures in Europe due to increased virus cases. Crude may remain under pressure ahead of US EIA inventory report as API report fueled expectations of an increase in US crude stocks,” said Ravindra Rao, VP-Head Commodity Research, Kotak Securities

In the futures market, crude oil for October delivery touched an intraday high of Rs 2,956 and an intraday low of Rs 2,894 per barrel on MCX. So far in the current series, black gold has touched a low of Rs 2,718 and a high of Rs 3,320.

Crude oil delivery for October gained Rs 17, or 0.58 percent, to Rs 2,937 per barrel at 15:47 hours IST with a business turnover of 4,471 lots.

Crude oil delivery for November was up Rs 25, or 0.84 percent, to Rs 2,989 per barrel with a business volume of 40 lots.

The value of October and November’s contracts traded so far is Rs 726.58 crore and Rs 50.78 crore, respectively.

Patel expects oil prices to trade sideways to down for the day with support at $37 and resistance at $41. MCX Crude oil October futures have support at Rs 2,830 with resistance at Rs 2,970.

West Texas Intermediate crude gained 0.35 percent at $39.94 per barrel, while Brent crude, the London-based international benchmark rose 0.50 percent to $41.93 per barrel.