May 15, 2021 07:35 PM
Crude oil had a choppy trading week and ended with modest gains on weaker dollar, prospects of increasing demand from US, China and Europe, falling oil inventories and increase in refinery utilisation rate in the US, rise in China’s oil imports, vaccination drive across US and China are the current push factors at play for the black gold.
Crude oil jumped Rs 25, or 0.53 percent, during the week and rose during four out of five trading sessions on the domestic bourse.bThe market initially shrugged off worries about the Colonial Pipeline shutdown and a potential US demand growth lent support.
The number of rigs drilling crude oil in the US increased by 8 to 352 for the week to May 14, the highest since April 2020, said Baker Hughes in a weekly report. The CFTC data showed that money managers decreased their net long positions by 24208 lots in the last week.
The ‘black gold’ has been trading higher than 5, 20, 50, 100 and 200 days’ simple moving averages and exponential moving averages on the daily chart. The momentum indicator Relative Strength Index (RSI) is at 54.57, indicating positive movement in prices.
Tapan Patel, Senior Analyst (Commodities), HDFC Securities said, “Crude oil prices reported third weekly gains on strong fundamentals despite India pandemic worries. Crude oil prices got a major boost from the supply disruption of the Colonial pipeline. The pipeline was downed by a cyber-attack and reopened after its operator reportedly paid a $5 million ransom to the hackers of its system.
Crude oil prices traded higher after OPEC and IEA kept a higher demand outlook in the second half of the year. The upside in oil prices is still capped on worries over slower demand from pandemic hit India.”