Crude oil gains as dollar falls from 12-week peak, driven by risk sentiment.

  • Kedia Advisory
  • Commodities News
Crude oil gains as dollar falls from 12-week peak, driven by risk sentiment.

Crudeoil yesterday settled down by -0.26% at 6503 as the dollar slid from a 12-week high on improved risk sentiment in financial markets. Overall gains remained limited as prospects of easing sanctions on Iran and Venezuela offset the narrative of tightening supply. Oil prices received some support after China announced new steps to bolster its flagging economy and struggling stock market, helping to alleviate fuel demand concerns. China approved the launch of 37 retail funds over the weekend and also halved the stamp duty on stock trading in the latest attempt to boost struggling markets. 

The new measures to woo investors came as data showed China's industrial profits extended a slump into a seventh month. Meanwhile, there are reports of the U.S. and Iran holding talks to revive the nuclear deal. Speculation is also rife that the U.S. could ease sanctions on Venezuela in a bid to boost supply. Also, concerns about China's economic outlook counterbalanced the effects of supply reductions from OPEC+ members such as Saudi Arabia and Russia. On the monetary policy front, Federal Reserve Chair Jerome Powell said that inflation remains too high and that the central bank is prepared to raise rates further if appropriate. 

Technically market is under long liquidation as the market has witnessed a remained unchanged in open interest by 0% to settle at 5823 while prices are down -17 rupees, now Crudeoil is getting support at 6429 and below the same could see a test of 6355 levels, and resistance is now likely to be seen at 6616, a move above could see prices testing 6729.

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