Mr. Sriram Iyer, Senior Research Analyst at Reliance Securities
International and domestic oil are on their way for a 2nd consecutive weekly gain.
NYMEX Gasoline and heating oil futures could also eke out small gains for the week, tracking gains in the crude oil prices and a draw in inventories for both products.
Prices found support as more than 28% of the U.S. Gulf of Mexico's production of crude and natural gas remained offline.
Additionally, data from U.S. EIA showed that U.S. crude oil stockpiles fell by 6.4 million barrels in the week to Sept. 10 to 417.4 million barrels, compared with expectations in a Reuters poll for a 3.5 million-barrel drop.
Data also showed that U.S. gasoline stocks fell by 1.9 million barrels while distillate stockpiles which include diesel and heating oil, fell by 1.7 million barrels.
Additionally, expectations demand will rise as vaccination roll-outs widen and also lent support.
Upside was capped after China's crude oil throughput fell in August and China is expected to auction off 7.4 million barrels of crude on Sept. 24.
Additionally both the OPEC+ and IEA reduced demand forecast for the final quarter of 2021.
OPEC expects oil demand to average around 99.70 million bpd in the final quarter of 2021, down 110,000 bpd from last month's forecasted figure. OPEC revised their 2022 global oil demand growth forecast to 4.15 million bpd compared to the previous 4.2 million bpd.
Meanwhile, IEA lowered its 2021 global oil demand growth forecast by 105,000 bpd to 5.2 million bpd but raised its 2022 figure by 85,000 bpd to 3.2 million bpd.
Looking ahead, prices could witness an initial correction due to weak demand forecasts and easing supply concerns.
The threat to U.S. Gulf crude production from Hurricane Nicholas receded.
However, it is returning more slowly than previously anticipated which supports prices at lower levels.
At the same time, return of normal across large parts of Asia hit some road bumps and as some countries still struggle to contain the delta variant spread and could cap further upside.
So prices could remain in a broad trading band next week.
Inventory data next week could be keenly awaited and another draw will lend support.
Technically, WTI Crude Oil holds a resistance zone near $73.90-$74.50 levels below which could see a correction up to $72.00-$71.20 levels. Resistance is at $74.00-$74.80 levels.
Domestically, MCX Crude Oil October holds a strong resistance near 5495 levels below which could see a Bearish momentum up to 5200-4975 levels. Resistance is at 5380-5490 levels.
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