Technically Crude oil market is under fresh selling and getting support at 3107 and below same could see a test of 3037 level, And resistance is now likely to be seen at 3306, a move above could see prices testing 3435.
Crude oil on MCX settled down -4.54% at 3178 dropped tracking weakness from Nymex Crude oil plunged more nearly 5 percent settled at $48.90/bbl, down by 4.80% despite news that OPEC has agreed to extend its supply quota plan.
Pressure had been seen as Investors had hoped the cartel might reduce output even further to drain a global glut that has depressed the market for almost three years. While OPEC and other major exporters extended their current deal to limit oil production for nine months, disappointing investors who were anticipating deeper cuts.
OPEC and other major producers, including Russia, will roll over their six-month deal to remove 1.8mbd from the market through March 2018. However, Nigeria and Libya will remain exempt from making cuts, Bloomberg said, and Iran remains reluctant.
OPEC’s oil minister said the extra nine months “should do the trick” of re-balancing the oil markets following a massive global supply glut. In economic news, A report released by the Labor Department on Thursday showed a slight uptick in first-time claims for US unemployment benefits in the week ended May 20th.
The report said initial jobless claims inched up to 234,000, an increase of 1,000 from the previous week’s revised level of 233,000. Now with this expectations for U.S. interest rates to rise next month and potentially again later in the year have been a major factor.
Federal fund futures implied that traders believe there is an 83 percent probability that the Fed will raise rates by a quarter of a percentage point at its June meeting.
CRUDE Trading Ideas:
–Crude oil trading range for the day is 3066 – 3235
–Crude oil dropped as the extension of output curbs by OPEC and other producing countries disappointed investors who had hoped for larger cuts.
–OPEC and some non-OPEC producers agreed to extend a pledge to cut around 1.8 million barrels per day (bpd) until the end of the first quarter of 2018.
–OPEC and non-members led by Russia decided to extend cuts in oil output by nine months to March 2018 as they battle a global glut of crude.