Mr. Sriram Iyer, Senior Research Analyst at Reliance Securities
International and domestic oil prices are on their way for a 2nd straight weekly loss after major global oil producers could come to a compromise about supply as OPEC likely to add more barrels after a compromise deal between leading OPEC producers.
Reuters reported Saudi Arabia and the United Arab Emirates (U.A.E.) have reached a compromise that should unlock an OPEC+ deal to boost global oil supplies.
Prices also fell after U.S. government data showed implied gasoline demand declining considerably last week.
Gasoline stocks rose by 1 million barrels, compared with expectations for a 1.8-million-barrel drop.
Overall product supplied, a measure of demand, was 20.6 million bpd over the last four weeks.
The U.S. EIA said crude stockpiles declined by 7.9 million barrels in the week to July 9, far more than expectations for a decrease of 4.4 million barrels.
However, the drawdown was overshadowed by lagging gasoline demand.
Meanwhile, back home, oil imports more than doubled to $10.68 billion in June from $4.93 billion a year earlier. It also rose from $9.45 billion in May suggesting robust demand for the fuel.
On the demand side, OPEC monthly report showed world oil demand to increase next year to around levels seen before the pandemic, about 100 million barrels per day (bpd), led by demand growth in the U.S., China and India.
OPEC output in June increased by 590,000 bpd to 26.03 million bpd, the report showed.
The market could trade weaker as markets will factor in the potential rise in supplies if OPEC+ producers reach a deal.
Rise in Delta variant across certain countries could prompt investors to move of risky assets like oil, so more correction can be expected.
Investors will also await inventory data next. Over the past 3 week, the markets have been witnessing constant draws and another draw will also lend support to prices.
On the charts, WTI Crude Oil below $75.50 level could see a Bearish momentum where its also trading below 21-Daily Moving Average which is placed at 73.50 level. Support holds near $70.00-$66.70 levels. Resistance is at $75.40-$76.50 levels.
Domestically, MCX Crude Oil is sustaining below 21-Daily Moving Average which is placed at 5475 level indicating for sideways to Bearish momentum up to 5290-5150 levels. Resistance is at 5450-5630 levels.
Strategy: - Crude Oil August: - Sell on rallies near 5400 with a stoploss at 5450 and a target at 5300.
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