Crudeoil on MCX settled down -0.5% at 3615 amid a new weekly rise in U.S. stockpiles, albeit less significant than expected, dampened investors’ optimism. Pressure also seen after the latest Baker Hughes U.S. oil rig count rose by 5, topping 600 for the first time since October 2015. Oilfield service firm Baker Hughes reported its weekly count of U.S. oil rigs rose by 5 and topped 600 for the first time since October, 2015, which added to concerns that record U.S. crude production may curtail OPEC's effort to drain excess supply in the industry.
Speaking at the International Petroleum Week conference in London last week, OPEC Secretary General, Mohammed Barkindo estimated that OPEC member states are about 90% in compliance with a global pact to cut production and noted the willingness of non-OPEC members to comply with the deal. The Organization of the Petroleum Exporting Countries signaled earlier in the week the possibility of further production cuts.
In November last year, OPEC and other producers, including Russia agreed to cut output by about 1.8 million barrels per day (bpd) in an effort to combat the oversupply issue that has pressured prices over the last two years. The rise in U.S. oil rigs came against a bullish report on crude inventories, released a day earlier, as the U.S. Energy Information Administration (EIA) said that crude oil inventories rose by only 0.564 million compared to estimates of an increase of 3.745 million barrels.
Technically market is under long liquidation as market has witnessed drop in open interest by -1.8% to settled at 9599 while prices down -18 rupees, now Crudeoil is getting support at 3595 and below same could see a test of 3575 level, And resistance is now likely to be seen at 3631, a move above could see prices testing 3647.