Fresh buying seen in MCX Crude Oil; Support seen at 2943
Commodity Online | November 08 2016
UPDATED 10:18:44 IST

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Crude Oil settled up by 0.92% at 2967 boosted by a commitment from OPEC to stick to a deal to cut output, but prices remained more than $7 below last month's high due to persistent doubts over the feasibility of the group's plan. The secretary-general of the Organization of the Petroleum Exporting Countries said the group was committed to an output-cutting deal made in Algiers in September. There are also risks that the oil glut, which has dogged markets for over two years, could continue as OPEC's de-facto leader Saudi Arabia threatened to increase production. Even if Saudi Arabia does not follow through on that threat, its exports could rise. Saudi local oil demand is falling, and just maintaining current output could imply higher exports. There were also signs of rising future U.S. output as the number of drilling rigs looking for new oil rose by nine to 450 in the week to Nov. 4, the highest level since February.

Appetite for riskier assets was boosted after the FBI announced on Sunday that it stood by a previous decision to not charge Democratic candidate Hillary Clinton over emails related to her private server. The news lifted a cloud over Clinton's presidential campaign just two days before the U.S. election and possibly blunted momentum for rival Donald Trump. Markets have tended to see Clinton as the status quo candidate, and news favoring her bid often boosts risk appetite. Technically market is under fresh buying as market has witnessed gain in open interest by 4.78% to settled at 25399 while prices up 27 rupee, now Crude oil is getting support at 2943 and below same could see a test of 2919 level, and resistance is now likely to be seen at 3000, a move above could see prices testing 3033.

Trading Ideas:
--Crude Oil trading range for the day is 2919-3033.
--Crude Oil gained boosted by a commitment from OPEC to stick to a deal to cut output.
--The secretary-general of the OPEC said the group was committed to an output-cutting deal made in Algiers in September.
--In US there were also signs of rising future output as the number of drilling rigs looking for new oil to produce rose by 9 to 450 in the week to Nov. 4.

Courtesy: Kedia Commodities