Mr. Sriram Iyer, Senior Research Analyst at Reliance Securities
International crude oil prices recovered all the losses from last week.
Domestic crude oil prices ended the week with gains.
Prices got a lift after U.S. government data showed that fuel demand climbed to its highest since the start of the COVID-19 pandemic.
The 4-week average for U.S. total product supplied, a proxy for fuel demand, soared to nearly 21 million barrels per day, its highest since March 2020, when governments first began to widely impose pandemic-related restrictions, U.S. Energy Information Administration data for last week showed.
Refiners have ramped up production to 92.4% of operable capacity, the highest since late June, helping send U.S. crude inventories to the lowest since January 2020.
Last week, crude inventories fell by 3 million barrels to 432.6 million barrels, their lowest since January 2020, the EIA said.
U.S. gasoline stocks fell 2.2 million barrels, vs. an expectation for a 1.6 million-barrel drop.
The price gains also came after Mexican supply fell by more than 400,000 barrels per day following a fire in the early half of the week at an oil platform.
Prices also got supported by full U.S. regulatory approval of vaccines for COVID-19 and its impact on stemming new infections and in turn helping demand.
The market could move higher next week supported by supply interruptions.
Energy companies are preparing for the possibility of a severe storm hitting the U.S. Gulf Coast this weekend.
The storm brewing in the Caribbean Sea could become a major hurricane and strike the U.S. Gulf Coast by this weekend, the National Hurricane Center said.
Meanwhile, markets could also to cues from the OPEC+ meeting on Sept. 1 to decide its policy amid calls from the United States to add more barrels to the market to help the global economic recovery.
Meanwhile, inventories next week also move the markets.
On the charts, WTI Crude Oil is trading near the pivotal level at $68.60 and a breakout above could push prices to $70.10 levels. A trade below could pull prices to the support at $67.00.
Domestically, MCX Crude Oil August is trading below the pivotal level at Rs. 5160 and a breakout above could push prices to Rs. 5300 levels. A trade below could pull prices to the support at Rs. 5000.
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