Crudeoil on MCX settled up 1.24% at 3668 finished up as support seen after NYMEX Crude settled up by 1%, at $54.33 a barrel as a top OPEC minister discussed the cartel's supply quota agreement. Support also seen as investors bid up futures contracts on the heels of growing optimism about compliance to a global pact to curb crude output.
The crude rally came as OPEC’s Secretary-General, Mohammad Sanusi Barkindo, offered encouragement about the effectiveness of the OPEC and non-OPEC countries’ agreement to shrink crude supply by about 2% globally. Moreover, Barkindo said U.S. shale production, which has been a nagging bugaboo in recent weeks for those fretting about risks to crude prices, isn’t likely to jeopardize efforts to limit oil.
Late last year, the 13 OPEC nations and 11 oil producers outside the group agreed to cut production in a bid to reduce alarmingly high global supplies and balance the market. But the U.S. isn’t a part of the global agreement, and the number of U.S. rigs drilling for oil has increased steadily since the OPEC agreement was put place in January, causing some to fret that resurgent U.S. production could destabilize prices and upend the pact.
In the week ahead, market participants will eye fresh weekly information on U.S. stockpiles of crude and refined products on Wednesday and Thursday to gauge the strength of demand in the world’s largest oil consumer. The reports come out one day later than usual due to Monday's President's Day holiday.
Meanwhile, traders will also continue to pay close attention to comments from global oil producers for further evidence that they are complying with their agreement to reduce output this year. Technically market is getting support at 3632 and below same could see a test of 3595 level, And resistance is now likely to be seen at 3700, a move above could see prices testing 3731.