Crude Oil on MCX settled down -3.13% at 2909 in the line of expectation carving out another three-week low, as doubts over the potential for a crude-production freeze persisted and data showing a contraction in the US manufacturing activity contributed to expectations of weaker energy demand. Meanwhile Russia’s energy minister has reportedly said that there was no need for talks to freeze output among major oil producers.
Alexander Novak said that with prices around $50 a barrel, it wan’t necessary for major oil producers to discuss freezing production levels, according to news reports. OPEC plans to hold an informal meeting on the sidelines of an energy forum in Algeria later this month to discuss ways to stabilize the oil market.
This week prices lost amid fading hopes of a production freeze and concerns about additional output from the Middle East and Africa weighed on sentiment. Chances that the upcoming meeting among major oil producers set to take place in Algeria in late September would yield any action to reduce the global glut appeared minimal after Saudi Arabia's energy minister said last week that he does not believe any "significant intervention" in the oil market is necessary.
An attempt to jointly freeze production levels earlier this year failed after Saudi Arabia backed out over Iran's refusal to take part of the initiative, underscoring the difficulty for political rivals to forge consensus. Investors are looking ahead to non-farm payroll data later in day to gauge the health of the U.S. economy, with a strong reading seen boosting the chance of a Fed interest rate hike soon. Technically market is getting support at 2867 and below same could see a test of 2824 level, and resistance is now likely to be seen at 2990, a move above could see prices testing 3070.
--Crude oil trading range for the day is 2824-3070.
--Crude oil prices fell after a rise in U.S. crude inventories focused attention on a supply glut that has pushed stockpiles to record highs around the world.
--Saudi Foreign Minister said OPEC and non-OPEC oil producers were moving towards a common position on production, suggesting talks in Algeria might be successful.
--Many investors doubt OPEC will be able to agree a common position on production and prices have fallen in recent days.
Courtesy: Kedia Commodities