Gold Silver Reports — Technically Crude oil market is under short covering as market has witnessed drop in open interest by 0.84% to settled at 18773 while prices up 11 rupees.
Now Crude oil is getting support at 2934 and below same could see a test of 2918 level, And resistance is now likely to be seen at 3024, a move above could see prices testing 3068.
Crude oil on MCX settled up 0.37% at 2980 paring some of its gains as the market weighed news from OPEC and other producers about prolonging output cuts against data showing the recovery in U.S. drilling.
The higher prices were a result of top exporter and de facto OPEC leader Saudi Arabia saying on Monday it would “do whatever it takes” to rebalance a market that has been dogged by oversupply for over two years, resulting in crude prices below $50 per barrel.
A cornerstone of the Saudi promise to rebalance the market would be to extend, potentially into 2018, a pledge led by the Petroleum Exporting Countries (OPEC) and other producers including Russia to cut output by almost 1.8 million barrels per day (bpd) during the first half of the year.
Despite these statements from Saudi Arabia, crude prices remain near levels seen before OPEC announced its plans to cut late last year. OPEC’s efforts to tighten the market and prop up prices have been undermined by a relentless rise in U.S. production, especially from shale oil drillers.
U.S. crude production has risen by over 10 percent since mid-2016 to 9.3 million bpd, close to the output of top producers Russia and Saudi Arabia. Data on Friday showed that the recovery in U.S. drilling had extended for a year. Investors were also digesting oil data from China that showed imports eased in April. — Neal Bhai Reports