Crude Oil on MCX settled down -0.66% at 3173 on renewed concerns about an oil glut, a stronger dollar and expectations that Nigerian rebels will stop hampering that country's crude output. Pressure seen on prices on caution over galloping Middle East crude output and a stronger dollar boosted by speculation of a U.S. rate hike by the year-end. Iraq, which has exported more crude from its southern ports in August, will continue ramping up output, its oil minister said. Top exporter Saudi Arabia has kept output at around record levels this month.
Yet concerns of a successful outcome to September talks among members of Organization of the Petroleum Exporting Countries (OPEC) about a production freeze continued to weigh on markets. Saudi Arabian Energy Minister Khalid Al-Falih tempered expectations that the world's major oil producers would look to freeze production next month, telling that the "market is moving in the right direction" already. Focus on surging Middle East production and the strengthening dollar also offset data from energy monitoring service Genscape showing a drawdown of 287,444 barrels at the Cushing, Oklahoma delivery point for U.S. crude futures during the week ended Aug. 26, traders who saw its report said.
Oil rallied with few stops from early August until mid last week after hints by Saudi Arabia and fellow members of the Organization of the Petroleum Exporting Countries that they may agree to an output freeze with non-OPEC oil producers at a meeting in Algeria on Sept. 26-28. Technically market is under long liquidation as market has witnessed drop in open interest by -1.04% to settled at 12152, now Crude Oil is getting support at 3148 and below same could see a test of 3122 level, and resistance is now likely to be seen at 3195, a move above could see prices testing 3216.
--Crude Oil trading range for the day is 3122-3216.
--Crude Oil dropped on renewed concerns about an oil glut and expectations that Nigerian rebels will stop hampering that country's crude output.
--Iranian officials have basically refused to cooperate on any production freeze at the upcoming OPEC meeting in September.
--Oil exports from Iraq's southern ports have averaged 3.205 million barrels per day (bpd) in August, exceeding the average level seen in July
Courtesy: Kedia Commodities