MCX Crude Gains Yet Again On Fresh Buying

Oil.......

MCX Crude oil futures managed to hold ground today as global prices lingered above $94 per barrel for WTI futures though some exhaustion seemed to be entering into the commodity. WTI futures are up from a one-month low and demand worries continue to keep sentiments haunted on the broader scale. The global equities were mixed today with losses for stocks in Asia and modest gains for stocks in Europe as the central banking decisions from ECB and BOE dominated much of the proceedings. The WTI Crude oil futures are quoting at $94.31, up 57 cents per barrel right now.

Stocks gained in Europe as the European Central Bank (ECB) kept its main lending rate at a record low 0.5%- a much-anticipated move. The ECB left its deposit rate, which it pays, banks on reserves held at the central bank, at zero. Markets are eying some dovish comments from Mario Draghi in the post meeting conference. Earlier in the day, the Bank of England (BOE) left the size of its bond-buying program unchanged at 375 billion pounds and kept its key-lending rate at a record low 0.5%.

The Euro held onto its gains after the ECB decision, striking a fresh one month high of 1.3131 against the US dollar. The currency has been rallying this week after the downturn in the euro zone economy eased for the second month running in May. At 47.7, the final Markit Eurozone PMI Composite Output Index was in line with its earlier flash estimate and above April's 46.9. Germany edged out of contraction territory in May, as an improvement in its manufacturing sector offset a slight decrease in service sector business activity.

Crude managed to hold on yesterday even as DOW dropped by a massive 200 points. U.S. Energy Information Administration reported that US crude oil supplies fell 6.3 million barrels for the week ended May 31, to 391.3 million barrels. Crude seems to be getting benefited from a combination of the drop in US crude supplies and weak US dollar. MCX Crude oil futures neared Rs 5400 per barrel levels in the session today and currently trade at Rs 5371, up Rs 12 per barrel on the day with a massive increase of 13.60% in open interest. The open interest has swung higher by around 50% in the current week, indicating a massive amount of fresh buying.
Source by Commodity Insights