Crude Oil Prices Gained On Growing Optimism

Crude oil prices gained on growing optimism that big producing countries will extend output cuts to curb a persistent glut in crude. Since the beginning of March, crude prices have swung from over $56 a barrel to under $47 as market participants were divided over the impact of rising output from the United States versus production cuts by the Organization of Petroleum Exporting Countries (OPEC) and other oil producers, including Russia.

But market watchers are growing more confident that OPEC, Russia and other big producers will extend cuts of almost 1.8 million barrels per day (bpd) until the end of March 2018. U.S. producers are not party to any agreements capping production. Rosneft, the largest oil producer in Russia, will meet agreements with OPEC on oil output reductions, the company's chief executive told reporters in Berlin. Still, there are signs that Saudi Arabia, OPEC's largest producer, is keeping markets well supplied.

Crude oil exports from Saudi Arabia rose by 275,000 barrels a day in March from February and stockpiles rose, official data showed. U.S. energy companies added oil rigs for an 18th week in a row, the second-longest such streak on record, as expectations of higher crude prices have motivated drillers to boost monthly shale production to its highest level since mid-2015. Drillers added eight oil rigs in the week to May 19, bringing the total count to 720, the most since April 2015, energy services firm Baker Hughes Inc said.

Technically market is under fresh buying as market has witnessed gain in open interest by 64.83% to settled at 9796 while prices up 40 rupees, now Crudeoil is getting support at 3252 and below same could see a test of 3228 level, And resistance is now likely to be seen at 3296, a move above could see prices testing 3316.

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Suhani Verma

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