Crudeoil on MCX settled down -0.58% at 3608 after data suggested drilling is ramping up in the United States, prompting investor concern about how effective OPEC and other producers will be at supporting prices by cutting supplies. The U.S. weekly oil and gas rig count from Baker Hughes showed that U.S. drillers added 15 oil rigs in the week, the 12th gain in 13 weeks. That brought the total count to 566, the most since November 2015. The Organization of the Petroleum Exporting Countries and other producers, including Russia, agreed to cut output by almost 1.8 million barrels per day (bpd) in the first half of 2017 to relieve a two-year supply overhang. But U.S. oil production has been rising, with the International Energy Agency forecasting total U.S. output growth of 320,000 bpd in 2017 to an average of 12.8 million bpd. Fundamental factors affected prices this week, such as gains in Iran's monthly oil exports in February and resilient production in Libya. A glitch in North Sea Buzzard crude production provided support. But market participants warned of more volatility ahead as speculators react to even small developments in the physical markets. U.S. Commodity Futures Trading Commission data showed that in the week to Jan. 24, hedge funds and other speculators boosted bullish wagers on U.S. crude oil to the highest since mid 2014. Technically market is under fresh selling as market has witnessed gain in open interest by 7.83% to settled at 8745 while prices down -21 rupees, now Crudeoil is getting support at 3568 and below same could see a test of 3528 level, And resistance is now likely to be seen at 3672, a move above could see prices testing 3736.

Trading Ideas:

Crudeoil trading range for the day is 3528-3736.

Crude oil dropped after data suggested drilling is ramping up in the United States.

The U.S. weekly oil and gas rig count from Baker Hughes showed that U.S. drillers added 15 oil rigs in the week, the 12th gain in 13 weeks.

OPEC other producers, including Russia, agreed to cut output by almost 1.8 mbpd in the first half of 2017 to relieve a two-year supply overhang