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TNS CMDTY/CRUDE WEEKLY:Crude seen flat as OPEC cut output, higher US rig count
MUMBAI, FEB 20 Crude futures on Multi Commodity Exchange (MCX) likely to trade flat for this week as higher United States rig count data counters Organisation of Petroleum Exporting Countries' production cut plan, said analysts.
"Prices of crude are going to be in range bound action due to compliance from OPEC and increase in US shale oil production," said Dheeraj Guglani, an analyst at Religare Commodities.
Prices of crude will remain down as US energy companies added oil rigs for a fifth consecutive week, extending a nine-month recovery, said analysts.
On Friday, US oil rigs count increased to 597 rigs in the week ended to Feb 17 as compared to 591 rigs in the previous week, Baker Hughes reported.
However, sharp fall in the prices will be cushioned by expectation of lower supply as OPEC compliances 90% of planned output cut, said analysts.
OPEC and other producers, including Russia had agreed to cut output almost 1.8 million barrels per day (bpd) during the first half of 2017.
In addition to that, investors expect OPEC to apply deeper cuts from July if global crude inventories fail to drop to a targeted level. Petroleum inventories are expected to fall by some 300 million barrels to the five-year average, said analysts.
West Texas Intermediate (WTI), the US benchmark, for February delivery rose 1.07% to $53.97 a barrel on the New York Mercantile Exchange for the week ended Feb 17.
Brent, European benchmark for March contract slumped 0.50% to $56.09 per barrel, on the London-based ICE Futures Europe exchange for the week ended Feb 17.
Crude oil is expected to find support at Rs 3,700-3,450 per barrel and resistance at Rs 3,700 per barrel, analysts said.
Crude for March delivery traded in Rs 3,611-3,629 per barrel range in the past five trading session on the Multi Commodity Exchange.
Sunday 19 February 2017
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