Crudeoil on MCX settled down -3.65% at 5255 after another outsize weekly build in U.S. crude stocks and OPEC’s suggestions the global market could be in a glut by next year. The ominous warning of oversupply was a one-two punch for a market already reeling from a selloff in the stock market, including in shares of energy companies. Hurricane Michael's devastation and its part-shutdown of oil production on the U.S. Gulf Coast were ignored as traders considered the possibility of a market awash in crude by 2019. On the oil front, U.S. crude inventories rose by 6 million barrels last week, the Energy Information Administration said, more than double expectations of a 2.6 million-barrel increase.
The Organization of the Petroleum Exporting Countries cut its forecast of global demand growth for oil next year for a third straight month, citing headwinds facing the broader economy from trade disputes and volatile emerging markets. OPEC sees the oil market as well supplied and is wary of creating a glut next year, the group's secretary-general said. In the U.S. Gulf of Mexico, producers had cut output by 40 percent on Thursday due to Hurricane Michael, according to the Bureau of Safety and Environmental Enforcement, even as some operators began returning crews to offshore platforms.
The cuts represent 680,107 barrels per day of oil production, the bureau said, citing reports from 30 companies. Michael crashed ashore Florida on Wednesday as the third most powerful hurricane to strike the U.S. mainland, leaving seven people least. It has since weakened to a tropical storm.
Technically now Crudeoil is getting support at 5203 and below same could see a test of 5151 level, And resistance is now likely to be seen at 5354, a move above could see prices testing 5453.
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