Crude oil fell as US crude exports raised worries about increased global supply

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Crude oil fell as US crude exports raised worries about increased global supply

Crude oil prices experienced a significant decline of -4.28% to settle at 5820 amid concerns over surging US crude exports, leading to apprehensions about increased global supply. The data revealed that US crude exports are approaching a record 6 million barrels per day, with a notable rise in flows to Europe and Asia. 

Despite OPEC's efforts to cut production, November saw a slight dip to 27.81 million bpd, with Saudi Arabia maintaining output close to 9 million bpd, while Iran increased its production. The scepticism surrounding the impact of OPEC cuts persisted, as more than 1.3 million bpd of the announced 2.2 million bpd cuts were extensions of voluntary reductions by Saudi Arabia and Russia. Russian Deputy Prime Minister Alexander Novak hinted at the possibility of deeper production cuts in Q1 2024 to address speculation and volatility. OPEC's November output decline, the first since July, was attributed to lower shipments by Nigeria and Iraq, aligning with ongoing cuts by Saudi Arabia and other OPEC+ members.

Technically, the market exhibited fresh selling with a notable increase in open interest by 34.07% to 18223, while prices faced a decrease of -260 rupees. Crude oil is currently finding support at 5714, and a breach below this level could test 5607. On the upside, resistance is anticipated at 5998, and a move above this level may lead to a test of 6175.

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