Short covering seen in MCX Crude Oil

Technically Crude Oil market is under short covering as market has witnessed drop in open interest by 7.39% to settled at 8850 while prices up 20 rupees.

Now MCX Crude Oil is getting support at 3922 and below same could see a test of 3891 level, And resistance is now likely to be seen at 3989, a move above could see prices testing 4025.

Crude Oil on MCX settled up 0.51% at 3952 as producer club OPEC seemed to stick to its supply cuts despite pressure from U.S. President Donald Trump. The United States, the world’s biggest oil consumer, was keen to counter a recent rally in prices driven by major exporters trimming production.

Trump expressed concern about oil prices and repeated his previous calls on the Organization of the Petroleum Exporting Countries (OPEC) to keep prices steady. OPEC and some non-affiliated producers such as Russia agreed late last year to cut output by 1.2 million barrels per day (bpd) to prevent a large supply overhang from growing.

Trump is attempting to ease prices lower, sanctions by the United States against oil exporters Iran and Venezuela have contributed to the recent gains and are providing a floor for prices. But when Washington re-imposed sanctions against Iran’s oil exports in November, it granted waivers to eight of Tehran’s buyers to import some oil for 180 days, which ends in May this year.

In December, OPEC and a group of 10 producers outside the cartel, led by Russia, agreed to collectively cut production by a total of 1.2 million barrels per day (bpd) during the first six months of 2019. Top exporter and OPEC’s de-facto leader Saudi Arabia recently pledged to cut even more production than the deal called for.

Trading Ideas:
–Crude Oil trading range for the day is 3891-4025.
–Crude Oil gained as producer club OPEC seemed to stick to its supply cuts despite pressure from U.S. President Donald Trump.
–The United States, the world’s biggest oil consumer, was keen to counter a recent rally in prices driven by major exporters trimming production.
–President Trump expressed concern about oil prices and repeated his previous calls on the OPEC to keep prices steady.

Courtesy: Kedia Commodities