Technically MCX Crude Oil is getting support at 3107 and below same could see a test of 3051 levels and resistance is now likely to be seen at 3194, a move above could see prices testing 3225.
Crude oil on MCX settled up 2.26% at 3162 as bearish data showing U.S. supplies of crude oil rose more than expected was overshadowed by a report from the International Energy Agency estimating global oil demand this year will climb by the most since 2015.
Crude prices recorded their largest one-day gain of the week, following data from the Opec and IEA, respectively, pointing to an uptick in global oil demand. The IEA revised upwards its estimate for demand growth in 2017 by 100,000 barrels a day (bpd) to 1.6m bpd, or 1.7%.
The bullish outlook for oil demand, lifted expectations that the demand and the supply imbalance in oil markets would continue to narrow in the coming months. A report from the Energy Information Administration (EIA) showing crude stockpiles rose more than expected last week threatened to derail earlier gains, following a bullish report from the International Energy Agency (IEA) on oil demand growth.
Inventories of U.S. crude rose by roughly 5.9m barrels in the week ended Sept. 8, confounding expectations of a rise of about only 3.2m barrels. It was the second weekly build in crude stockpiles. Gasoline inventories, one of the products that crude is refined into, fell by roughly 8.4m barrels, beating expectations of a draw of 2m barrels while distillate stockpiles fell by 3.2m barrels, topping expectations of a decline of 1.5m barrels.
The bigger-than-expected draw in gasoline stockpiles comes after heavy flooding due to storm Harvey knocked out nearly quarter of the U.S. refining capacity in August.
--Crude oil trading range for the day is 3051-3225.
--Crude oil gains as support seen after report from the International Energy Agency estimating global oil demand this year will climb by the most since 2015.
--Prices seen supported despite U.S. government data showing another big build in U.S. crude inventories due to Hurricane Harvey.
--The IEA raised its 2017 global oil demand growth estimate to 1.6 million barrels per day (bpd) from 1.5 million bpd.
Courtesy: Kedia Commodities