Crude futures on Multi-Commodity Exchange are likely to trade extend fall for sixth straight trading week on increasing supplies from global market and subdued demand from bulk consumers, analysts said.
"Higher global supplies are likely to pressurise the prices of crude," said Madhavi Mehta, research analyst with Kotak Commodities.
Global oil supply surged by 550,000 barrels per day in June, on higher output from both Organisation of Petroleum Exporting Countries (OPEC) and non-OPEC producers, International Energy Agency (IEA) said.
World oil production jumped by 3.1 million barrels per day to 96.6 million barrels per day, with OPEC crude and natural gas liquids accounting for 60% of the gain. Non-OPEC supply growth is expected to grind to a halt in 2016, as lower oil prices and spending cuts take a toll.
OPEC, which pumps about a third of the world's crude, said its total production rose in June by 283,000 barrels a day compared with May, to 31.38 million barrels, driven mainly by higher output from Iraq, Nigeria and Saudi Arabia.
OPEC members pumped 31.25 million barrels per day in the second quarter against demand of 28.26 million barrel per day, the Reuters data showed.
The OPEC produced around 3 million barrels per day above demand in the second quarter.
Crude oil prices may also be under pressure on weak global demand forecast, analysts said.
"Demand for crude oil is very weak s prices are likely to fall," Kaynath Chainwala, research analyst with Angel Commodities.
Global oil demand growth is forecast to slow to 1.2 million barrels per day in 2016, from an average 1.4 million barrels a day this year, International Energy Agency (IEA) said in its oil market report (OMR).
World oil demand growth appears to have peaked in the first quarter at 1.8 million barrels a day and will continue to ease throughout the rest of 2015 and into 2016 as temporary support fades.
Meanwhile, US oil inventories rose by 1.9 million barrels to 462 million barrels for week ended Jul 24 compared with analysts' expectations for a decline of 184,000 barrels, data by American Petroleum Institute (API) showed.
US fuel stockpile rose by 4.2 million barrels to 468.1 million barrels for week ended Jul 24 compared with analysts' expectations for a decline of 850,000 barrels, data by Energy Information Administration (EIA) showed.
West Texas Intermediate, the US benchmark, for September delivery slumped 0.82% to $47.74 a barrel on the New York Mercantile Exchange for the week ended Jul 25.
Brent, European benchmark for September contract plunged 3.28% to $52.83 per barrel, on the London-based ICE Futures Europe exchange for the week ended Jul 25.
However, any movement in the local currency will also impact crude oil prices, analysts said.
The local currency fell 0.15% to Rs 64.13/$1 in the week ended Jul 31.
Crude oil is expected to find support at Rs 2,910-2,960 per barrel and resistance at Rs 3,180-3,300 per barrel, analysts said.
Crude for August delivery traded in Rs 3,008-3,177 per barrel range in the past five trading session on the Multi Commodity Exchange.
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