Crude Oil - May 28, 2020 - HDFC Securities

Mr. Tapan Patel- Senior Analyst (Commodities), HDFC securities

Crude oil prices continued decline with NYMEX WTI Crude oil prices fell by more than 3% to $31.75 on Thursday. Crude oil futures prices at MCX for June contract fell by nearly 4% to Rs.2420 by noon session.

Crude oil prices extended decline on feeding hopes of demand recovery and bearish weekly inventory data. The US API data showed that crude oil inventories rose by 8.7 mb compare to the decline of 1.9 mb. The US Department of Energy is scheduled to release weekly inventory data at 8:30 pm tonight.

The expectations of rise in weekly inventories and rising tensions between US and China has lowered hopes of demand recovery from top oil consumers. The Chinese parliament has approved the National Security Law for Hong Kong and Macau. The US President is expected to response on the issue by the week. However, China has warned of counter retaliation on any measures from US.

We expect oil prices to trade sideways to down for the day with support at $30 and resistance at $34. MCX Crude oil June futures has support at Rs. 2175 with resistance at Rs.2510.

Source : Equity Bulls

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