Crudeoil On MCX Settled Up 0.88%

Crudeoil on MCX settled up 0.88% at 2990 boosted by lower U.S. stockpiles, a slight slowdown in U.S. crude production and signs of increased Chinese demand, but trading was volatile as global supply remained strong. Prices also seen supported boosted by a report from the International Energy Agency (IEA) that demand growth is accelerating and from the U.S. Energy Information Administration (EIA) that oil stocks had fallen.

Still, oil stocks remained comfortably above the five-year average, and prices are more than 16 percent below their 2017 highs, despite an extension to March 2018 of output cuts of 1.8 million barrels per day (bpd) coordinated by the Organization of the Petroleum Exporting Countries. OPEC's rebalancing effort has been stymied in part by rising output from members Libya and Nigeria, which were exempt from cuts and are currently producing some 700,000 bpd more than at the time of the initial November OPEC cut agreement.

U.S. oil production C-OUT-T-EIA has also risen by more than 10 percent over the past year to 9.4 million bpd. U.S. crude inventories registered a larger-than-expected draw and investors cheered data pointing to an increase in demand for oil from China as imports increased 13.8% to 8.55m bpd during the first six months of the year, compared to the same period a year ago.

That outweighed the bearish news that OPEC compliance on the agreement to extend production cuts with non-OPEC members led by Russia by 1.8 million barrels per day through March 2018 hit 78%, its lowest level in six months. Technically now Crudeoil is getting support at 2958 and below same could see a test of 2927 level, And resistance is now likely to be seen at 3015, a move above could see prices testing 3041.

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Suhani Verma

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