Crudeoil On MCX Settled Up 1.1%

Crudeoil on MCX settled up 1.1% at 3213 after sinking in the previous session, following investor disappointment that the OPEC-led deal extension failed to include deeper cuts to rein in the glut in supply. The OPEC-led decision to extend a production cut to March 2018 disappointed financial investors, prompting an exit from oil futures markets, while refiners in Asia were mostly concerned with whether it meant they would need to go hunting for crude. 

In Vienna, the Organization of the Petroleum Exporting Countries (OPEC) and some non-OPEC producers extended a pledge to cut 1.8 million barrels per day (bpd) of output until the end of the first quarter of 2018. U.S. oil production has already risen by 10 percent since mid-2016 to over 9.3 million bpd, close to the output of top producers Russia and Saudi Arabia. Goldman Sachs warned that the biggest risk to oil markets was what would happen next year, at the end of the OPEC-led production cut. With U.S. output rising steadily and OPEC and its allies potentially ramping up production in 2018 to regain lost market share, many traders already expect another price slump.

Investors are questioning to what extent the deal will encourage a further rise in U.S. shale activity and what happens after the deal expires next year. Investors are questioning to what extent the deal will encourage a further rise in U.S. shale activity and what happens after the deal expires next year. U.S. production has increased by over 10% since mid-2016 to some 9.3 million barrels a day.

Technically now Crudeoil is getting support at 3148 and below same could see a test of 3083 level, And resistance is now likely to be seen at 3249, a move above could see prices testing 3285. 

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Suhani Verma

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