Crude oil prices declined to Rs 2,696 per barrel on June 15 as participants unwound their long positions. Oil prices fell on concerns of a second wave of coronavirus infections as rising cases in the United States and China may impact fuel demand.
The number of rigs drilling crude oil in the US fell by 7 rigs to 199 last week. An online meeting of OPEC+ is scheduled this week to review state of the market and discuss production cuts to see whether members have complied with their share of output reduction.
Tapan Patel, Senior Analyst (Commodities), HDFC Securities said crude oil prices continued downside on Monday on demand growth worries with rise in cases in the US, Beijing and Tokyo. The investors turned cautious over the fear of a second wave of virus infections which led to selling in crude oil prices along with equity indices.
Crude oil prices also traded under pressure on disappointing industrial production data from China which came at 4.4 percent for May against a forecast of 5 percent.
In the futures market, crude oil for June delivery touched an intraday high of Rs 2,717 and an intraday low of Rs 2,615 per barrel on the Multi Commodity Exchange (MCX). So far in the current series, black gold has touched a low of Rs 1,361 and a high of Rs 4,415.
Crude oil futures for June delivery slipped Rs 28, or 1.02 percent, to Rs 2,710 per barrel at 15:23 hours IST on a business turnover of 4,668 lots. The same for July delivery was down Rs 27, or 0.97 percent, to Rs 2,745 per barrel on a business volume of 358 lots.
The value of June and July contracts traded so far is Rs 1,499.74 crore and Rs 17.43 crore, respectively. Patel expects oil prices to trade down for the day with support at $34 and resistance at $38. MCX Crude oil June futures has support at Rs 2,610 with resistance at Rs 2,760.