Crude oil prices rose somewhat due to supply disruption in the Gulf of Mexico due to Tropical Storm Ida. However, growing coronavirus infections, improved supply in Mexico, and conflicting economic data from the US and China affected the price. Following a gap-up start, the energy commodity traded in the green, mirroring the robust overseas trend.
At 16:16 hours IST, crude oil delivery for September gained Rs 9, or 0.18 percent, to Rs 5,053 per barrel on the MCX, with a transaction turnover of 5,210 lots. With a business volume of 291 lots, the October delivery increased by Rs 5, or 0.10 percent, to Rs 5,049 per barrel. So far, the value of contracts exchanged in September and October is Rs 891.92 crore and Rs 17.62 crore, respectively.
West Texas Intermediate (WTI) crude rose 1.65% to $68.53 a barrel, while Brent crude, the international benchmark based in London, rose 1.44 percent to $71.19 per barrel. NYMEX crude is trading near $68.5/bbl, boosted by storm concerns in the Atlantic, a drop in US crude oil stocks, and an increase in US gasoline demand. However, improving supplies from Mexico, mixed US and Chinese economic data, and persistent virus threats are all impacting prices. Crude may trade rough due to a mix of variables, but storm fears may keep costs maintained, according to Ravindra Rao, CMT, EPAT, VP- Head Commodity Research at Kotak Securities.
The momentum indicator Relative Strength Index (RSI) is at 48.85, indicating that prices are neutral. The Organization of Petroleum Exporting Countries (OPEC) meets on September 1 to deliberate its policy in the face of a push from the United States to provide additional barrels to the market to aid the global economic recovery.
The second-quarter US GDP estimate was raised from 6.5 percent to 6.6 percent, compared to the previous forecast of 6.7 percent growth.
Crude oil prices rose on the prospect of a supply disruption in the Gulf of Mexico as Tropical Storm Ida approached the crucial producing region. Energy companies have begun to shut down production in the Gulf of Mexico ahead of a potential hurricane expected to arrive this weekend.
Currently, crude oil prices are to trend flat to higher, with resistance at $72 per barrel and support at $67 per barrel. The September MCX Crude oil contract has a support level of Rs 4,980 and a resistance level of Rs 5,180.
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