Crudeoil on MCX settled up 1.04% at 3588 after OPEC sources said the group could extend its oil supply-reduction pact with non-members and might even apply deeper cuts if global crude inventories failed to drop to a targeted level. The Organization of the Petroleum Exporting Countries (OPEC) and other producers including Russia have agreed to cut output by almost 1.8 million barrels per day (bpd) during the first half of 2017, and estimates suggest compliance by OPEC is around 90 percent.
The production cuts are aimed at curbing global oversupply that has dogged markets since 2014. Yet despite action so far, inventories remain bloated and supplies high, especially in the United States. To help rebalance the market, OPEC sources told Reuters that the supply reduction pact could be extended or deepened if all major producers showed “effective cooperation”. Traders said that until more clarity on a potential extension of production cuts was achieved, oil prices would be capped. U.S. crude oil and gasoline inventories soared to record highs last week as refineries cut output and gasoline demand softened, the Energy Information Administration said.
Crude inventories rose by 9.5 million barrels in the week ended Feb. 10, nearly triple expectations, boosting commercial stocks to an all-time record at 518 million barrels. Gasoline stocks rose 2.8 million barrels, compared with expectations for a 752,000-barrel drop. That pushed inventories of the fuel to a record 259 million barrels. Technically market is under short covering as market has witnessed drop in open interest by -25.38% to settled at 6911 while prices up 37 rupees, now Crudeoil is getting support at 3548 and below same could see a test of 3509 level, And resistance is now likely to be seen at 3611, a move above could see prices testing 3635.
MCX CRUDE OIL TRADING IDEA TODAY :
* Crudeoil trading range for the day is 3509-3635.
*Crude oil rose after OPEC sources said the group could extend its oil supply-reduction pact with non-members and might even apply deeper cuts.
*OPEC and other exporters including Russia agreed last year to cut output by 1.8 million barrels per day (bpd) to reduce a price-sapping glut.
*Global inventories are bloated and supplies high, especially in the United States.