Crude Gained Support After Russia Threatened To Cut Off Oil And Gas Supplies

  • Commodities Analysis
  • Editors Pick

Crude oil yesterday settled up by 0.96% at 6975 after the latest threat from Russia to choke off oil and gas supplies if price caps are imposed. Reports that the Biden administration might stop dumping barrels from the U.S. Strategic Petroleum Reserve on the market after October contributed as well to oil's uptick. The Energy Information Administration (EIA) showed a large build-up of U.S. crude inventories last week. The data said crude inventories rose by 8.8 million barrels last week. A report from Baker Hughes said the number of active U.S. rigs drilling for oil fell by five to 591 this week, after seeing a decline of nine rigs last week.
 
The total active U.S. rig count, which includes those drilling for natural gas , dropped by one to 759, the data showed. Kazakhstan's oil output, excluding condensate, fell by 13% to 1.196 million barrels per day (bpd) (5.077 million tonnes) in August from 1.378 million bpd (5.850 million tonnes) in July. The fall in output was due to a sharp decline in production in the giant Kashagan oil field after a gas leak early in August, as well as planned output curbs in the Tengiz field due to regular maintenance.
  
Technically market is under short covering as the market has witnessed a drop in open interest by -13.02% to settle at 7115 while prices are up 66 rupees, now Crude oil is getting support at 6830 and below same could see a test of 6685 levels, and resistance is now likely to be seen at 7097, a move above could see prices testing 7219.
 
Trading Ideas:
# Crude oil trading range for the day is 6685-7219.
# Crude oil prices continued to find support after the latest threat from Russia to choke off oil and gas supplies if price caps are imposed.
# Kazakhstan's oil output fell 13% in August vs July
# Crude inventories rose by 8.8 million barrels last week – EIA

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