MCX Crude Oil under short covering; Support seen at 2756
Commodity Online | September 16 2020
UPDATED 09:50:30 IST

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Technically Crude Oil market is under short covering as market has witnessed drop in open interest by 3.07% to settled at 1923 while prices up 80 rupees.

Now MCX Crude Oil is getting support at 2756 and below same could see a test of 2683 levels, and resistance is now likely to be seen at 2873, a move above could see prices testing 2917.

Crude Oil yesterday settled up by 2.91% at 2828 supported by hurricane supply disruptions in the United States, but concerns about a stalled global economic recovery and falling fuel demand, as Libya signalled it would end its months-long blockade and resume output, adding yet more supply to the market.

OPEC and allies such as Russia are unlikely to announce further curbs to oil output this week despite a price drop, sources told, and will extend the period for countries like Iraq and Nigeria to compensate for earlier overproduction.

OPEC and allies, a group known as OPEC+, have been reducing production since May to support oil prices after global demand plunged in the wake of the coronavirus pandemic.

World oil demand will fall more steeply in 2020 than previously forecast due to the coronavirus and recover more slowly than expected next year, OPEC said, potentially making it harder for the group and its allies to support the market.

U.S. energy firms cut the number of oil and natural gas rigs operating for the first time in four weeks even as a rebound in crude prices from coronavirus lows over the past few months prompted some producers to return to the wellpad. The U.S. oil and gas rig count, an early indicator of future output, fell by two to 254 in the week to Sep. 11, according to data from energy services firm Baker Hughes Co.

Trading Ideas:
--Crude Oil trading range for the day is 2683-2917.
--Crude Oil gained supported by hurricane supply disruptions in the United States.
--Libya signalled it would end its months-long blockade and resume output, adding yet more supply to the market.
--OPEC+ Sept meeting unlikely to advocate deeper oil output cuts.

Courtesy: Kedia Commodities