Crudeoil on MCX settled up 1.81% at 3269 after Kuwait gave its backing for an extension of OPEC production cuts in an attempt to reduce global oversupply. Kuwait oil minister Essam al-Marzouq said his country was among several nations supporting the extension of a deal between the Organization of the Petroleum Exporting Countries and other exporters to limit output, state news agency KUNA reported.
Yet concerns about the glut linger as OPEC grapples to tighten the oil market because inventories in many parts of the world are at, or near record highs and U.S. production has been rising. OPEC agreed to reduce oil production by 1.2 million barrels per day during the first six months of the year. Output has fallen for a third straight month and members have complied with 95 percent of their commitments.
Russia has reduced its output by 200,000 bpd in March in accordance with the agreement, the ministry quoted Energy Minister Alexander Novak said. Libya said production dropped by about a third or 250,000 bpd earlier this week due to armed protesters blocking western oilfields of Sharara and Wafa.
The start-up of a 500,000 bpd crude pipeline in North Dakota next month, despite opposition by environmental groups and Native Americans, is expected to hasten a revival in output from the Bakken region which fell sharply along with global oil prices during the past two years. Technically market is under short covering as market has witnessed drop in open interest by -12.54% to settled at 14504 while prices up 58 rupees, now Crudeoil is getting support at 3229 and below same could see a test of 3189 level, And resistance is now likely to be seen at 3292, a move above could see prices testing 3315.