MCX Crude Oil under long liquidation; Support seen at 3743

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Technically Crude Oil market is under long liquidation as market has witnessed drop in open interest by 12.45% to settled at 11635 while prices down 101 rupees.

Now MCX Crude Oil is getting support at 3743 and below same could see a of 3670 levels, and resistance is now likely to be seen at 3920, a move above could see prices testing 4024.

Crude Oil on MCX settled down 2.58% at 3815 after official data showed U.S. of products like rose sharply last week, suggesting weak demand during the peak driving season. Prices also seen under pressure on worries over a conflict have eased, oil production in the Gulf of has resumed after a storm and worries have emerged over Chinese economic growth.

On the oil supply front, data from the U.S. showed a larger-than-expected drawdown in crude stockpiles last week, but traders focused on large builds in refined product inventories dragging prices down. U.S. crude inventories fell 3.1 million barrels, the EIA said, more than forecasts for a decrease of 2.7 million barrels.

Crude production was disrupted last week by Storm Barry, which came ashore on Saturday in central Louisiana as a Category 1 hurricane, the first major storm to hit the U.S. Gulf of Mexico this season. More than half of daily crude production in the Gulf of Mexico remained offline by Tuesday, as most oil companies were re-staffing facilities to resume production.

The market shrugged of another incident involving a tanker in the Middle East amid tensions between the United States and . U.S. officials say they are unsure whether an oil tanker towed into Iranian waters was seized by or rescued after facing mechanical faults as Tehran asserts, creating a mystery at a time of high tension in the Middle East.

Trading Ideas:
–Crude Oil trading range for the day is 3670-4024.
–Crude Oil dropped after official data showed U.S. stockpiles of products like gasoline rose sharply last week, suggesting weak demand during the peak driving season.
–Prices also seen under pressure on worries over a Middle East conflict have eased, oil production in the Gulf of Mexico has resumed after a storm.
–Data from the U.S. Energy Information Administration showed a larger-than-expected drawdown in crude stockpiles last week.

Courtesy: Kedia Commodities

Source: Commodityonline.com