MCX Crude Oil futures open in red amid OPEC’s decision to maintain supply restraints; analyst recommends buy for this target

MCX October Oil Futures opened with a negative bias on Tuesday, correcting by Rs 15 or 0.26 per cent and were trading at Rs 5810 per bbl at 9:05 am. It had ended in the green on Monday up almost 3.8 per cent or Rs 213 from the previous closing price on Friday. The Oil Futures settled at Rs 5829 per bbl. The OI was 11667 barrels at the close with the total value that traded standing at Rs 4855.28 cr.  

Expert Anuj Gupta, Vice President (VP), Commodity and Currency Research at IIFL Securities, recommends a buy on Oil Futures at Rs 5750 per barrel with a stop loss at Rs 5650 and target price at Rs 5900.  

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Oil prices eased on Tuesday after climbing to their highest levels in years in the previous session on the decision by OPEC and allied major oil producers to maintain restraint on supply, a Reuters report said. 

The Organisation of the Petroleum Exporting Countries (OPEC) and its allies including Russia, collectively known as OPEC+, said on Monday it would maintain an agreement to increase oil production only gradually, ignoring calls from the United States and India to boost output as the world economy recovers, if patchily, from the coronavirus pandemic, this report said.
Brent crude was down by 3 cents at UD 81.83 a barrel by 0054 GMT (6:24 am IST), having risen 2.5 per cent on Monday. US West Texas Intermediate (WTI) oil dropped 10 cents to USD 77.52, after gaining 2.3 per cent the previous session.
Oil prices have already surged more than 50 per cent this year, leading to fears of an inflationary pressure. 

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Gupta expects the prices to move north in the immediate term leading to spike in the domestic prices of petrol and diesel. On Tuesday, the prices of petrol and diesel were hiked after remaining stable on Monday. 

The petrol costs Rs 102.64 per litre in Delhi while Diesel costs Rs 91.07.