Crude Oil prices gained after a U.S. government report showing hefty draws in diesel and gasoline offset the first crude inventory build in six weeks. The U.S. Energy Information Administration reported a drop of 3.7 million barrels for distillates late on Thursday, which include diesel and heating oil, and a 1.9-million barrel decline for gasoline. However, U.S. crude stocks rose for the first time in six weeks, swelling by 4.9 million barrels in the week to Oct. 7 to 474 million barrels.
Outside the United States, traders said that Brent prices were being supported by technical indicators, which had attracted investment from financial market participants. In a separate report, the EIA said U.S. crude output averaged 8.7 million bpd in 2016 versus 9.4 million bpd last year. But it also said oil demand growth was expected to slow to 70,000 bpd this year from a previously forecast 200,000 bpd. Oil prices have trended higher since Sept. 27, with Brent gaining about 13 percent, after the Organization of the Petroleum Exporting Countries announced its first planned output cut in eight years to rein in a global supply glut that forced crude to crash from highs above $100.
Despite its expressed desire to cut output, OPEC this week reported September production at eight-year highs. Oil industry executives and investors at a Reuters Summit differed on how OPEC action will likely affect oil prices, with some expecting $60 by year-end and others seeing a return to $40. Technically market is under fresh buying as market has witnessed gain in open interest by 5.48% to settled at 16118, now Crude Oil is getting support at 3317 and below same could see a test of 3269 level, and resistance is now likely to be seen at 3399, a move above could see prices testing 3433.
--Crude Oil trading range for the day is 3269-3433.
--Crude Oil prices gained after a U.S. government report showing hefty draws in diesel and gasoline offset the first crude inventory build in six weeks.
--The U.S. Energy Information Administration (EIA) said crude stocks swelled 4.9 million barrels in the week ended Oct. 7.
--The EIA reported a drop of 3.7 million barrels for distillates, which include diesel and heating oil, and 1.9 million barrels decline for gasoline.
Courtesy: Kedia Commodities