Commodity Trading Tips for Crudeoil by Kedia Commodity

Crudeoil on MCX settled down -0.75% at 3581 fell tracking weakness from Nymex Crude oil which dropped nearly 1% to settle at $52.63/bbl while prices fell around 5 percent from their early January peak as rising U.S. drilling activity offset efforts by OPEC and other producers to cut output in an effort to prop up the market. Sentiments for crude oil prices remain weak as news of another weekly increase in U.S. drilling activity had oil forecasters concerned that production cuts from other producing nations may not reduce the global supply glut as much as had been hoped. The number of active U.S. oil rigs rose last week to the highest level since November 2015, according to Baker Hughes data, with drillers encouraged by oil prices above $50 a barrel. Meanwhile the OPEC and other producers including Russia agreed to cut output by almost 1.8mbpd in the first half of 2017 to relieve a two-year supply overhang. First indications of compliance to that deal show members have cut production by 900,000bpd in January, according to Petro-Logistics, which tracks OPEC supply. Reuters' most recent survey indicated that OPEC production declined slightly in December. In the week ahead, market participants will eye fresh weekly information on U.S. stockpiles of crude and refined products on Tuesday and Wednesday to gauge the strength of demand in the world's largest oil consumer. Traders will also continue to pay close attention to comments from global oil producers for further evidence that they are complying with their agreement to reduce output this year. Technically market is getting support at 3551 and below same could see a test of 3520 level, And resistance is now likely to be seen at 3627, a move above could see prices testing 3672.

Trading Ideas:

Crudeoil trading range for the day is 3520-3672.

Crude oil dropped as news of another weekly increase in U.S. drilling activity spread concern over rising output.

IEA does not expect oil demand to peak any time soon due to rising consumption in developing economies, Director Fatih Birol said.

U.S. oil production has been rising, with the International Energy Agency forecasting total U.S. output growth of 320,000 bpd in 2017.