MUMBAI – Crude oil contracts on Multi Commodity Exchange of India fell today tailing benchmark contracts on the New York Mercantile Exchange that declined in thin trade as US markets were closed on the account of Independence Day. Concerns over demand continued to weigh on the global prices.
A firm rupee against the dollar also dragged the Indian prices of the crude.
At 1806 IST, the July crude oil contract on MCX was at 3,920 rupees per bbl, and the August delivery contract on NYMEX at $57.13 a bbl, both down 0.4%.
Weekly data from the US Energy Information Administration noted a smaller-than-expected fall in the crude inventories despite it being the peak demand season–the US driving season–which was also a negative for prices.
The EIA reported Wednesday that crude inventory fell by 1.1 mln bbl in the week ended Friday, much lower than the expectation of a 2.6-mln-bbl decline. Adding to the bearish report, US supply rose by 100,000 bpd to 12.2 mln bpd.
“The significantly smaller inventory reduction as compared to the previous week was due to a strong countermovement in net imports. They had fallen sharply in the previous week, thereby facilitating the massive inventory reduction,” a report by Commerzbank AG said.
For more cues, investors will eye the meeting between top US and Chinese representatives next week to resolve a year-long trade war that has hit global growth and consequently dented demand for the fossil fuel.
“Thursday’s softening in Asia confirms that as soon as any price-supportive short-term data such as US stock changes is factored in, crude succumbs to the persistent downward pressure being exerted by global economic and oil demand growth concerns,” Vandana Hari, an independent energy analyst, said in a report on Vanda Insights.
“With OPEC meeting and US inventory report out of picture and US markets closed today for Independence Day holiday, we are likely to see listless trade in crude,” a report by Kotak Securities said.
For the rest of the session, the MCX contract is seen finding support at 3,800.5 rupees and resistance is likely at 4,043.5 rupees. The NYMEX contract is seen in a range of $54.75-$59.05 a bbl.