Crude oil futures edged lower to Rs 2,978 per barrel on October 19 as participants increased their short position as seen by the open interest. Crude oil prices declined on worries that fuel demand could take a hit after a spike in COVID-19 cases in the US and Europe.
The number of rigs drilling crude oil in the US rose by 12 to 205 for the week ended October 16, said Baker Hughes in a weekly report.
Prices were also weighed down after last week’s meeting of the OPEC+ Joint Technical Committee reported a gloomier fuel demand outlook because of fears of a prolonged second wave of the COVID-19 pandemic. Market participants will keep an eye on OPEC+ JMC meet later today for any further cues.
West Texas Intermediate crude was down 0.71 percent quoting at $40.83 per barrel, while Brent crude, the London-based international benchmark eased 0.75 percent to $42.61 per barrel.
MCX iCOMDEX Crude Oil Index dropped 19.70 points, or 0.56 percent, at 3,482.11 at 16:03.Tapan Patel- Senior Analyst (Commodities), HDFC securities said, “Crude oil prices traded weak with NYMEX WTI Crude oil prices traded marginally down by 0.44 percent at $41 on Monday. MCX Crude oil November futures were trading down to Rs 2,978 by noon session in line with weak global oil prices.”
Crude oil prices have capped upside on slower demand recovery amid COVID-19 pandemic effects and oversupply scenario. The renewed hopes over US stimulus may support prices to trade firm, underpinning weak China GDP data.
Patel expects crude oil prices to trade sideways to up with support at $39 and resistance at $42. MCX Crude oil November has support at Rs 2,970, resistance at Rs 3,060.
In the futures market, crude oil for October delivery touched an intraday high of Rs 3,023 and an intraday low of Rs 2,971 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 slipped by Rs 17, or 0.57 percent, to Rs 2,978 per barrel at 16:06 hours IST with a business turnover of 2,919 lots.
Crude oil delivery for November dipped by Rs 20, or 0.66 percent, to Rs 3,002 per barrel with a business volume of 840 lots.
