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Technically MCX Crude Oil is getting support at 3626 and below same could see a test of 3524 levels and resistance is now likely to be seen at 3810, a move above could see prices testing 3892.
Crude Oil on MCX settled up 4.22% at 3727 after the United States and China agreed to a 90-day truce in their trade war, and ahead of a meeting by producer club OPEC that is expected to result in a supply cut.
U.S. crude prices were further pushed up by an announcement from Canada that Alberta province will force producers to cut output by 8.7 percent, or 325,000 barrels per day (bpd), to deal with a pipeline bottleneck that has led to crude building up in storage.
Most of Alberta’s oil is exported to the United States. China and the United States agreed during a weekend meeting in Argentina of the Group of 20 (G20) leading economies not to impose additional trade tariffs for at least 90 days while the pair hold talks to resolve existing disputes.
Crude oil has not been included in the list of hundreds of products each side has slapped with import tariffs, but traders said the positive sentiment of the truce was also driving crude markets. Looking ahead, oil traders will eye a meeting by the Organization of the Petroleum Exporting Countries (OPEC) on Dec. 6.
At the meeting, the producer group, along with non-OPEC member Russia, is expected to announce cuts aimed at reining in a production overhang that has pulled down crude prices by around a third since October.
No official announcements regarding supply cuts have yet been made, but most analysts expect a reduction of 1 million-1.4 million bpd versus October levels, which were the highest by OPEC as a group since December 2016.
Trading Ideas:
–Crude Oil trading range for the day is 3524-3892.
–Crude Oil gained after US and China agreed to a 90-day truce in their trade war, and ahead of a meeting by OPEC that is expected to result in a supply cut.
–U.S. crude oil production has hit a record of more than 11.5 million barrels per day, resulting in swelling storage levels.
–OPEC’s biggest problem is surging production in the United States, where output has grown by around 2 million bpd in a year to more than 11.5 million bpd.
Courtesy: Kedia Commodities
Source: Commodityonline.com
