Crudeoil On MCX Settled Down -0.31% At 2896

Crudeoil on MCX settled down -0.31% at 2896 weighed down by a continuing expansion in U.S. drilling that has helped to maintain high global supplies despite an OPEC-led initiative to cut production to tighten the market. That was their lowest since Nov. 29, the day before the Organization of the Petroleum Exporting Countries (OPEC) and other producers agreed to cut output for six months from January.

OPEC supplies jumped in May as output recovered in Libya and Nigeria, two countries exempt from the production cut agreement. Libya's oil production has risen more than 50,000 bpd after the state oil company settled a dispute with Germany's Wintershall, a Libyan source told. Still, Saudi Energy Minister Khalid al-Falih remained confident OPEC's cuts were working. The oil market is heading in the right direction but still needs time to rebalance, al-Falih told the London-based newspaper Asharq al-Awsat.

There are also indicators that demand growth is stalling in Asia, the world's biggest oil-consuming region, even though China increased the 2017 oil import quotas for its refineries. Japan's customs-cleared crude imports fell 13.5 percent in May from a year earlier. India took in 4.2 percent less crude in May than the year before. Saudi Arabia's crude exports in April fell to 7 million bpd, official data showed.

Saudi Energy Minister Khalid al-Falih said the oil market needed time to rebalance. Technically market is under fresh selling as market has witnessed gain in open interest by 145.87% to settled at 20995 while prices down -9 rupees, now Crudeoil is getting support at 2876 and below same could see a test of 2857 level, And resistance is now likely to be seen at 2924, a move above could see prices testing 2953.

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Suhani Verma

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