Crudeoil On MCX Settled Down -1.01% At 3142


Crudeoil on MCX settled down -1.01% at 3142 tracking weakness from Nymex Crude oil which settles at lowest level in 5 weeks fell dropped nearly 1%, to settle at $48.84 a barrel as uncertainty surrounds the possibility for an OPEC output cut extension. Prices continue to face pressure, as softer than expected data, weighed on oil prices, despite a rift in Libya that reflects continued reduced production. Spending in the U.S. is still subdued, along with manufacturing. Former Fed chief Ben Bernanke says the economy continues to rebound as expected. Meanwhile fighting in Libya continues as Two oil vessels illicitly carrying crude from Libya have been captured by the country’s naval forces according to reports. Libya’s NOC has said that it would target production of around 1.2mbpd by the end of this year, but this level is currently much lower.

As per OPEC’s secondary sources, Libya produced 622,000 barrels per day in March, down from 683,000 bpd in February. Lastweek data from Baker Hughes BHI, +0.57% showed a rise in active U.S. oil rigs for a 15th week in a row, implying that further gains in domestic production could be ahead. Meanwhile OPEC suggested the supply cuts have had some success, with U.S. inventories falling for the past three weeks, while global inventories increased less than normal during the first quarter. The recovery in Libyan oil production is also weighing on sentiment, also like the recovery in U.S. shale oil production, any sustained recovery in Libyan and/or Nigerian production limits the impact of the OPEC-led production cuts. Technically market is getting support at 3125 and below same could see a test of 3108 level, And resistance is now likely to be seen at 3166, a move above could see prices testing 3190. 
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Suhani Verma

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