Crudeoil On MCX Settled Down -4.01%

Crudeoil on MCX settled down -4.01% at 2966 plunged approaching its lowest of the year after weekly government data left the oil market with virtually nothing to cheer. With refinery activity on wane and exports fading, as a weekly report from the EIA on Wednesday showed US crude, gasoline and distillates stocks swelled in the week ended May 26. Inventories of US crude rose by roughly 3.3m barrels in the week ended May 26, confounding expectations of draw of around 3.5m barrels.

Gasoline inventories rose by 3.324m barrels against expectations for a rise of only 580000 barrels while distillate stockpiles unexpectedly rose by 4.4m barrels, compared to expectations of a 280,000 rise. The faster than expected increase in gasoline inventories surprised investors, as the summer months are traditionally associated with the start of the U.S. summer driving season, which usually spurs heavier refining activity.

The sharp rise in US inventories comes a day after the EIA lowered its crude oil price forecast and raised its US production outlook for 2018. Crude oi prices have suffered a volatile start the week, tumbling more than 1% on Monday, after Saudi and other Arab states severed diplomatic ties with Qatar, fuelling investor concerns about a disruption to the global deal to curb the glut supply.

Middle East tensions, however, have eased over the past few days, as Kuwait oil minister Essam al-Marzouq quelled fears about a potential disruption to the Opec led deal, insisting that Qatar was committed to the Opec agreement to restrict supply. Technically market is getting support at 2909 and below same could see a test of 2853 level, And resistance is now likely to be seen at 3066, a move above could see prices testing 3167.

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Suhani Verma

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