MCX Crude Oil under short covering; Support seen at 3079
Commodity Online | July 23 2020
UPDATED 09:50:51 IST

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Technically Crude Oil market is under short covering as market has witnessed drop in open interest by 4.04% to settled at 1187 while prices up 11 rupees.

Now MCX Crude Oil is getting support at 3079 and below same could see a test of 3024 levels, and resistance is now likely to be seen at 3166, a move above could see prices testing 3198.

Crude Oil yesterday settled up by 0.35% at 3135 recovered on shrot covering after prices dropped as industry data showed a bigger- than-expected inventory build in the United States where coronavirus cases continue to climb, potentially further denting demand in the world's biggest oil consumer.

In his first briefing in months focused on the pandemic, U.S. President Donald Trump said that the outbreak would probably get worse before it gets better, one of his first recent acknowledgements of the spread of the problem.

Industry group American Petroleum Institute (API) reported U.S. crude inventories rose last week by 7.5 million barrels compared with expectations for a draw of 2.1 million. Crude stocks at the Cushing, Oklahoma, delivery hub rose by 716,000 barrels, API said.

Refinery crude runs rose by 54,000 barrels per day, API data showed. Gasoline stocks fell by 2 million barrels, compared with expectations for a draw of 618,000 barrels.

There are also signs that Iraq, the second-largest producer in the Organization of the Petroleum Exporting Countries (OPEC), is still not meeting its target under an OPEC-led supply cut deal.

Southern Iraqi exports in the first 20 days of July averaged 2.70 million bpd, according to data from Refinitiv Eikon and two industry sources, equal to official data for exports in all of June.

Trading Ideas:
--Crude Oil trading range for the day is 3024-3198.
--Crude Oil recovered on short covering after prices dropped as industry data showed a bigger- than-expected inventory build in the United States where coronavirus cases continue to climb.
--API reported U.S. crude inventories rose last week by 7.5 million barrels compared with expectations for a draw of 2.1 million.
--There are also signs that Iraq, the second-largest producer in the OPEC, is still not meeting its target under an OPEC-led supply cut deal.

Courtesy: Kedia Commodities