Crude Oil On MCX Settled Up

Crudeoil on MCX settled up 1.39% at 3211 as U.S. crude inventories grew less than expected, supply disruptions continued in Libya and the OPEC-led output cut by producing countries looked likely to be extended. The Energy Information Administration (EIA) reported that crude inventories rose 867,000 barrels last week, nearly half the build expected, as refineries ramped up processing after seasonal maintenance and as imports dropped and exports rose. 

U.S. refinery crude runs rose 425,000 barrels per day as utilization rates jumped 1.9 percentage points to 89.3 percent of capacity, the EIA data showed. EIA data showed a 3.7 million-barrel drop in gasoline stocks last week, nearly 2 million barrels more than forecast. U.S. crude exports surged 12 percent in 2016 to 520,000 barrels per day and China became the third-biggest overseas destination for U.S. crude last year, according to EIA data, up from ninth the previous year. 

Still supporting prices was Tuesday's declaration of force majeure by Libya's National Oil Corp after production from the western Libyan fields of Sharara and Wafa was blocked by armed protesters, reducing output by some 250,000 bpd. OPEC member Libya, whose oil sector suffered from the unrest that followed the toppling of Muammar Gaddafi in 2011, was excluded from output cuts agreed last year. 

Iranian Oil Minister Bijan Zanganeh said the Organization of the Petroleum Exporting Countries and other major producers were likely to extend their six-month agreement to cut output beyond June. Technically market is under short covering as market has witnessed drop in open interest by -12.97% to settled at 16584 while prices up 44 rupees, now Crudeoil is getting support at 3167 and below same could see a test of 3124 level, And resistance is now likely to be seen at 3237, a move above could see prices testing 3264 .

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Suhani Verma

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