Technically Crude Oil market is getting support at 3657 and below same could see a test of 3635 levels and resistance is now likely to be seen at 3709, a move above could see prices testing 3739.
Crude Oil on MCX settled up 0.41% at 3678 gained ahead of U.S. inventories data while last night prices got support after API said that US crude stocks fell by 6.356 million barrels last week. Market expected a 1.545 million barrels drop in crude stocks, while distillate stocks were seen down by 1.164 million barrels and gasoline inventories were expected up by 737,000 barrels.
The API data also showed a rise of 869,000 barrels in gasoline stockpiles, while inventories of distillates fell by 1.7 million barrels. While the estimates will be followed by official data from the EIA on Wednesday.
Crude oil prices settled higher as traders weighed the prospect of an extension to the production-cut agreement against expectations of higher US output. Crude oil prices pared some of Monday’s losses to settle higher amid expectations that the OPEC will agree to extend output curbs beyond the March 2018 deadline at its upcoming meeting on Nov 30.
In May, Opec producers agreed to extend production cuts for a period of nine months until March, but stuck to production cuts of 1.2 million bpd agreed in November last year. Some market participants, however, remained uncertain whether Russia will agree to extend output cuts for a prolonged period amid fears that major oil producers who are not part of the pact will ramp up output to gain market share.
While data last week showed U.S. oil producers - not part of the production-cut agreement - ramped up output to record levels, fuelling fears that rising US output will continue to undermine OPEC’s efforts to rebalance oil markets.
--Crude Oil trading range for the day is 3635-3739.
--Crude oil gained as traders weighed the prospect of an extension to the production-cut agreement against expectations of higher US output.
--OPEC together with a group of non-OPEC producers led by Russia has been restraining output since the start of this year to try to lower global inventories.
--The deal is due to expire in March 2018, and OPEC meets on Nov. 30 to discuss the policy.
Courtesy: Kedia Commodities