Crude oil futures edged higher to Rs 3,468 per barrel on December 14. Crude oil price extended gain in the afternoon session after a gap up opening on optimism over the potential vaccine rollout.

Oil prices touched levels of $50 for the first time since March, edging higher on optimism surrounding vaccinations, the OPEC+ deal, plus strong demand in Asia.

According to CFTC data, hedge funds and other money managers raised their net long US crude futures and options position in the last week. The speculator group increased its combined futures and options position in WTI by 2,864 contracts to 319,285 during the period ended December 8.

Navneet Damani, VP Commodities Research, Motilal Oswal Financial Services said, “The vaccine optimism seems to continue unscathed due to the back-to-back approvals vaccines are getting and the quicker-than-previously-thought rollout of the first campaigns in key markets. The market will also be looking for progress on new stimulus in the US, with a bipartisan group of lawmakers poised to unveil a $908 billion pandemic relief bill, although there’s no guarantee it will pass Congress.”

“Crude markets reflect a market that completely ignores the fragility it is still in for the short-term, as traders have decided to look past it and focus on the eventual back-to-normal once the vaccines are deployed. The upside looks limited and correction looks possible as sentiments have gone farfetched without any fundamental support”, he said.

Tapan Patel- Senior Analyst (Commodities), HDFC Securities

We expect crude oil prices to trade up with support at $46 and resistance at $48. MCX Crude oil December has support at Rs 3,420, resistance at Rs 3,540.

Ravindra Rao, VP- Head Commodity Research at Kotak Securities

“NYMEX crude trades in a narrow range above $47/bbl supported from vaccine progress and OPEC’s gradual production hike stance. This is countered by rising virus cases and rise in US crude oil rig count to May highs. Crude oil continues to hold on to recent gains however we may not see sustained rise given the increasing virus cases and restrictions.”