Crude oil futures traded firm at Rs 2,902 per barrel on October 6 as participants increased their long positions. Prices gained tracking gains in equity markets, growing optimism of a US stimulus package and a labour strike in Norway.
Prices also rose on news that tropical storm Delta has rapidly strengthened to a hurricane in the Gulf of Mexico later this week forcing energy firms to evacuate offshore oil platforms.
However, resurgence of the COVID-19 virus raised worries over the reinforcement of a lockdown in major economies, which undermined the outlook for crude. The Organisation of the Petroleum Exporting Countries (OPEC) is also reluctant to increase oil production from January 2021 in an attempt to counter the weak demand.
MCX iCOMDEX Crude Oil Index traded 10.53 points, or 0.31 percent, higher at 3,401.73 at 15:33 hours.
“Although crude has bounced back sharply from the lows, the momentum may weaken at higher levels as demand concerns persist,” said Ravindra Rao, VP- Head Commodity Research at Kotak Securities.
In the futures market, crude oil for October delivery touched an intraday high of Rs 2,925 and a low of Rs 2,873 per barrel on the Multi-Commodity Exchange (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 futures for October delivery rose Rs 3, or 0.10 percent, to Rs 2,902 per barrel at 15:37 hours IST on a business turnover of 3,424 lots. The same for November delivery gained Rs 9, or 0.31 percent, to Rs 2,943 per barrel on a business volume of 141 lots.
The value of October and November’s contracts traded so far is Rs 917.21 crore and Rs 0.93 crore, respectively.
Anuj Gupta- DVP- Commodities and Currencies Research, Angel Broking, said, “Traders can buy crude oil at Rs 2,840, with a stop loss of Rs 2,780, for a target of Rs 2,950. We expect WTI crude oil to test $42 levels soon.”
West Texas Intermediate crude was up 0.69 percent at $39.49 per barrel, while Brent crude, the London-based international benchmark, increased 0.78 percent to $41.61 per barrel.