Crude oil futures declined to Rs 2,830 per barrel on September 8 as participants increased their short position as seen by the open interest. Crude oil prices slipped on concerns over demand recovery due to the coronavirus pandemic and the end of US summer driving season.
The black gold has been under pressure due to correction in US equity markets and gains in the US dollar.
Tapan Patel, Senior Analyst (Commodities), HDFC Securities, said crude oil prices extended decline on demand growth worries as the Labour Day holiday in the US marks the end of the peak driving season. The rising virus cases are still a concern for oil demand recovery as the total number of global cases topped 27.2 million as of September 8, according to Johns Hopkins University data.
“NYMEX crude trades 3.24 percent lower near $38.48/bbl weighed down by mixed economic data, rising US-China tensions, rise in US crude oil rig count and Saudi move to cut prices for Asian customers. However, supporting the price is robust Chinese imports and possibility of another decline in US crude oil stocks. Crude may remain choppy amid mixed factors but the possibility of another decline in US crude oil stocks may keep prices supported near $38/bbl-37.90/bbl,” said Ravindra Rao, VP- Head Commodity Research, at Kotak Securities.
In the futures market, crude oil for September delivery touched an intraday high of Rs 2,880 and an intraday low of Rs 2,816 per barrel on MCX. So far in the current series, black gold has touched a low of Rs 2,816 and a high of Rs 3,285.
Crude oil delivery for September slipped Rs 69, or 2.38 percent, to Rs 2,830 per barrel at 15:21 hours IST with a business turnover of 4,585 lots.
Crude oil delivery for October slides Rs 66, or 2.25 percent, to Rs 2,873 per barrel with a business volume of 172 lots.
The value of September and October contracts traded so far is Rs 730.28 crore and Rs 5.67 crore, respectively.
Patel expects oil prices to trade down for the day with MCX Crude oil, September futures have support at Rs 2,790 with resistance at Rs 2,890.
West Texas Intermediate crude declined 3.85 percent at $38.24 per barrel, while Brent crude, the London-based international benchmark, was down 1.74 percent to $41.28 per barrel.
Source:-moneycontrol.com