MCX Crude Oil - October futures gain over 3% intraday; buy for this price target
Taking cues from the global situation unfolding, the oil futures on domestic commodities markets followed suit. The October Oil futures gained almost 3.2 per cent on the MCX and were trading at Rs 6130 bbl or Rs 189 higher from the Friday closing price
The energy crisis gripping many top economies led to a shoot-up in crude oil prices. Oil prices rose 2 per cent up on Monday extending multiweek gains, Reuters reported. Brent crude was up USD 1.62 cents, or 2 per cent at USD 84.01 a barrel by 0914 GMT (2:44 pm IST), the highest level since October 2018, the report said.
US oil rose USD 1.95, or 2.5 pr cent, at USD 81.30 a barrel, the highest since late 2014.
See Zee Business Live TV Streaming Below:
Taking cues from the global situation unfolding, the oil futures on domestic commodities markets followed suit. The October Oil futures gained almost 3.2 per cent on the MCX and were trading at Rs 6130 bbl or Rs 189 higher from the Friday closing price.
Analyst Anuj Gupta recommends a buy at Rs 6040 with a stop loss at Rs 5970 and the target price at Rs 6150.
The October Oil futures are expected to trade positively throughout the trading session, a Motilal Oswal report said. It puts the resistance between Rs 6120 and Rs 6160 while the support between Rs 6030 and Rs 5980. Dip buying is advised for the day.
Coal and gas prices have also been surging as economies recover, making oil more attractive as a fuel for power generation, pushing crude markets higher, the report said.
"There`s no direct news flow, the moves are momentum-driven, where intermarket factors implying higher expected inflation are supporting the bullish move in oil prices," said Kelvin Wong, commodities analyst at CMC Markets in Singapore.
In India, some states are experiencing electricity blackouts because of coal shortages, while in China the government has ordered miners to ramp up coal production as power prices surge.
The energy crisis sweeping the world is raising the prospect of a difficult northern winter as heating demand rises.
The Organization of the Petroleum Exporting Countries (OPEC) and allies, together called OPEC+, last week decided to maintain a steady and gradual increase in production.
"Depleting stocks, OPEC discipline and the ongoing energy crunch will provide solid price support in the next three months," said Tamas Varga, oil analyst at London brokerage PVM Oil Associates.
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.