Crudeoil On MCX Settled Up 0.48% At 2959

Crudeoil on MCX settled up 0.48% at 2959 after a Nigerian oil pipeline leak offset fears that excess Nigerian crude would add to the uptick in global production but gains were limited as investors braced for a rise in Libyan output while the number of active U.S. drilling rigs rose. The Organization of the Petroleum Exporting Countries and other big producers have agreed to pump almost 1.8 million barrels per day (bpd) less than they supplied at the end of last year, and hold output there until the first quarter of 2018.

Inventories of refined products were also up, despite the start of the peak-demand summer season. Those are similar amounts to May and April, indicating that even in Asia, with its strong demand growth, traders are struggling to clear inventories. And more production is coming. Libya's 270,000-bpd Sharara oilfield has reopened after a workers' protest and should return to normal production within three days, the National Oil Corp said on Friday.

Iran's oil exports to the West surged in May to their highest level since the lifting of sanctions in early 2016 and almost caught up with volumes exported to Asia, a source familiar with Iranian oil exports said. Iran, which used to be OPEC's second biggest oil exporter, has been raising output since 2016 to recoup market share lost to regional rivals including Saudi Arabia and Iraq.

While many Asian nations continued to purchase oil from Iran during sanctions, Western nations halted imports, halving Iran's overall exports to as little as one million barrels per day (bpd). Technically now Crudeoil is getting support at 2922 and below same could see a test of 2884 level, And resistance is now likely to be seen at 2986, a move above could see prices testing 3012.

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Suhani Verma

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