MCX Crude Oil under fresh selling; Support seen at 3819

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Technically Crude Oil market is under fresh selling as market has witnessed gain in open interest by 7.75% to settled at 9944 while prices down 96 rupees.

Now MCX Crude Oil is getting support at 3819 and below same could see a test of 3752 level, And resistance is now likely to be seen at 3957, a move above could see prices testing 4028.

Crude Oil on MCX settled down 2.41% at 3886 as U.S. crude output and exports chase new records, undermining efforts by producer club to tighten global markets.Prices also took a hit after ECB President Mario Draghi said the economy was in “a period of continued weakness and pervasive uncertainty”.

A slowdown in would also likely result in stalling fuel demand, putting pressure prices. On the supply side, prices have been receiving support this year from output cuts led by the Organization of the Petroleum Exporting Countries (OPEC).

Together with some non-affiliated producers like , the producer group has pledged to withhold around 1.2 million barrels per day (bpd) of supply to tighten markets and prop up prices.

But these efforts are being undermined by soaring U.S. crude oil production, which has increased by more than 2 million bpd since early 2018, to an unprecedented 12.1 million bpd. That makes America the world’s biggest producer, ahead of Russia and .

As a result, U.S. crude exports have also been chasing new records, reaching 3.6 million bpd in February – more than OPEC members like the United Arab Emirates, Kuwait or Iran produce.

 The U.S. Energy Information Administration reported that inventories fell by 4.23 million barrels last week, versus forecasts for a draw of 2.08 million barrels. Distillate , which include diesel, decreased by 2.39 million barrels, more than the expected decline of 1.44 million barrels.

Trading Ideas:
–Crude Oil trading range for the day is 3752-4028.
–Crude Oil dropped as U.S. crude output and exports chase new records, undermining efforts by producer club OPEC to tighten global markets.
–A slowdown in growth would also likely result in stalling fuel demand, putting pressure prices.
–Prices also took a hit after ECB President Mario Draghi said the economy was in “a period of continued weakness and pervasive uncertainty”.

Courtesy: Kedia Commodities

Source: Commodityonline.com