MCX Crude Oil under short covering; Support seen at 2940
Commodity Online | October 23 2020
UPDATED 09:50:04 IST

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Technically Crude Oil market is under short covering as market has witnessed drop in open interest by 1.47% to settled at 1070 while prices up 48 rupees.

Now MCX Crude Oil is getting support at 2940 and below same could see a test of 2882 levels, and resistance is now likely to be seen at 3041, a move above could see prices testing 3084.

Crude Oil yesterday settled up by 1.63% at 2998 with a fall in U.S. jobless claims boosting expectations for an economic recovery and progress toward another round of coronavirus aid among U.S. lawmakers helping to ease worries about energy demand.

Meanwhile, Russian President Vladimir Putin said his country has not ruled out delaying OPEC+ production increases that are set to be implemented in January, Bloomberg News reported Thursday, providing further support for oil prices.

U.S. oil demand is down about 13% from last year due to the coronavirus pandemic. Exports have become critical revenue sources for many oil companies, and the United States had regularly been exporting more than 3 million barrels per day (bpd) of crude oil.

But U.S. output is not expected to recover to its 2019 peak of nearly 13 million bpd, which could hamstring exports. U.S. crude oil and distillate inventories fell last week, while gasoline stocks rose in another weak showing for fuel demand, the Energy Information Administration said.

Refinery runs and crude production both fell sharply, however, attributed to ongoing disruptions from Hurricane Delta. October crude flows into Asia are expected to close at year-low levels as demand weakened, with 102.32 million mt (24.19 million bpd) notionally assessed so far.

Trading Ideas:
--Crude Oil trading range for the day is 2882-3084.
--Crude Oil finished higher with a fall in U.S. jobless claims boosting expectations for an economic recovery and progress toward another round of coronavirus aid.
--U.S. crude exports likely to be muted through 2020 as production slides.
--U.S. crude stockpiles dip, gasoline builds amid weak fuel demand -EIA.

Courtesy: Kedia Commodities

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