Technically MCX Crude Oil is getting support at 4824 and below same could see a test of 4748 levels and resistance is now likely to be seen at 5030, a move above could see prices testing 5160.
Crude Oil on MCX settled down 3.37% at 4900 as raising OPEC output, and the reopening of terminals in Libya dented investor expectations for a global supply shortage. Inventories of U.S. crude fell by 12.633 million barrels for the week ended July 6, confounding expectations for a draw of 4.489 million barrels, according to data from the Energy Information Administration (EIA).
The large draw in crude supplies came as imports fell by 1.315 million barrels a day (bpd), and output remained roughly flat at 10.9 million bpd, the EIA said. The production shutdown at Canada's Syncrude - which has capacity to produce 350,000 bpd of oil – continued to weigh on North American crude supplies.
The mostly bullish inventory report failed to lift sentiment amid investor concerns about an increase in global supplies as OPEC output increased last month, while Libya resumed export activities, which could see as much as 0.7 million bpd return to the market.
The announcement by Libya's National Oil Corp that four export terminals were being reopened, ending a standoff that had shut down most of Libya's oil output, was the catalyst for a correction. The reopening allows the return of as much as 850,000 barrels per day of crude into international markets.
OPEC output rose above 32.3 million bpd in June, up 173,000 bpd from the previous month, according to OPEC's monthly report. The increase was led by a rise in Saudi output to levels not seen since the output-cut agreement in 2016. Saudi Arabia reported that it pumped nearly 10.5 million bpd last month, up from about 10 million bpd in May.
--Crude Oil trading range for the day is 4748-5160.
--Crude oil dropped as raising OPEC output, and the reopening of terminals in Libya dented investor expectations for a global supply shortage.
--Inventories of U.S. crude fell by 12.633 million barrels for the week ended July 6, confounding expectations for a draw of 4.489 million barrels.
--PEC forecast world demand for its crude will decline next year as growth in consumption slows and rivals pump more, pointing to a market surplus returning.
Courtesy: Kedia Commodities