Oil prices continued its gaining streak and opened the first session of September by scoring a seven month-high-mark -the highest in over half a year and were on track to snap a two-week losing streak, buoyed by expectations of tightening supplies.
Saudi Arabia is widely expected to extend a voluntary 1 million barrel per day (bpd) oil production cut into October, prolonging supply curbs by the Organization of the Petroleum Exporting Countries and allies (OPEC+) to support the rise in oil prices.
Russia, the world’s second-largest oil exporter, has already agreed with OPEC partners to cut oil exports next month, Deputy Prime Minister Alexander Novak said on Thursday.
Brent crude was up $1.25, or 1.4 per cent, at $88.08 a barrel. Earlier it gained to a session high of $88.42 a barrel, the highest since January 27. US West Texas Intermediate crude (WTI) had risen $1.39, roughly 1.7 per cent, to $85.02. It rose earlier to $85.39, the highest since November 17. Brent is up about 4.2 per cent this week while WTI has advanced by 6.5 per cent, according to news agency Reuters.
Back home, on the Multi Commodity Exchange (MCX), crude oil futures due for a September 19 expiry, were last trading higher by 2.55 per cent at ₹7,046 per bbl, having swung between ₹6,910 and ₹7054 per bbl during the session so far, against a previous close of ₹6,871 per barrel.
The Energy Information Administration (EIA) data showed that the crude oil inventories drew down by 10.6 million barrels last week, more than expected on the back of robust exports and sturdy demand from refineries. Crude inventories dropped to 422.9 million barrels, the lowest level since December 2022.
Both OPEC and the International Energy Agency are depending on the world’s biggest oil importer, China, to shore up oil demand over the rest of 2023, but the sluggish recovery of the country’s economy has investors concerned.
Technical View
Religare Broking has neutral sentiments on MCX Crude Oil. ‘’Extended gains above 7,060 may strengthen the prices further. However, a dip below 6,890 may induce weakness as well,” said the brokerage firm in its research report. Religare sees technical levels between ₹6,410 – ₹7,400. The turnaround is seen at ₹6,890.
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Updated: 01 Sep 2023, 09:50 PM IST