Crude oil futures gain nearly 1%, WTI trades above $40 a barrel

Crude oil futures rose to Rs 3,068 per barrel on July 15 as participants increased their long positions after data showed a sharp drawdown in US crude stocks.

The American Petroleum Institute (API) reported that US crude inventories decline 8.32 million barrels for the week-ended July 10.

Sunilkumar Katke, Head - Commodity and Currency, Axis Securities, said, "There is still a lot of uncertainty linked to demand with the rapid rise in COVID 19 cases, backed by escalating US-China trade concerns and differences over Hong Kong issues that may keep crude's upward journey limited. With US announcing an additional $3 trillion stimulus measures on July 13, prices are finding support in hopes of a recovery in demand."

Tapan Patel, Senior Analyst (Commodities), HDFC Securities, said, traders and investors will await a decision from OPEC's Joint Ministerial Monitoring Committee (JMMC) on output cuts.

In the futures market, crude oil for July delivery touched an intraday high of Rs 3,084 and an intraday low of Rs 3,044 per barrel on the Multi-Commodity Exchange (MCX). So far in the current series, black gold has touched a low of Rs 1,655 and a high of Rs 3,153.

Crude oil futures for July delivery gained Rs 30, or 0.99 percent, to Rs 3,065 per barrel at 15:00 hours IST on a business turnover of 4,702 lots.

The same for August delivery edged higher by Rs 29, or 0.95 percent, to Rs 3,093 per barrel on a business volume of 178 lots.

The value of July and August's contracts traded so far is Rs 759.10 crore and Rs 5.92 crore, respectively.

Katke expects MCX crude oil prices to touch levels of Rs 3,120 per barrel from their current levels of Rs 3,050 and advises a buy with a stop loss at Rs 3,000.

West Texas Intermediate crude gained 0.87 percent at $40.64 per barrel, while Brent crude, the London-based international benchmark, was up 0.70 percent to $43.20 per barrel.