Oil stocks had been in concentrate today as Brent crude futures surged more than $70 a barrel on Monday for the initially time because Coronavirus pandemic started, following the reports of attacks on Saudi Arabian oil facilities. S&P BSE Oil & Gas index reached a record higher of 16,588.30 level, led by gains in GAIL, ONGC (Oil and Natural Gas Corporation Ltd), Indian Oil Corporation Ltd, which hit their respective new 52-week highs. Also, Reliance Industries Ltd (RIL) stock cost jumped 2.4 per cent to Rs 2,231 apiece. In the afternoon bargains, Brent crude futures for May had been up 1.64 per cent to $70.50 a barrel. Moreover, right after a gap of 13 months, Brent crude oil cost had breached the $60 a barrel mark.
Similarly, the S&P BSE Energy index also scaled a fresh all-time higher of 6,925.72 level. The leading gainers in the index had been Hindustan Oil Exploration Co., Oil India Ltd, Coal India, Bharat Petroleum Corporation Ltd (BPCL), and Hindustan Petroleum Corporation Ltd (HPCL) amongst other individuals. The index had hit a 52-week low of 3,011.34 on March 23, 2020, on the back of coronavirus-induced lockdown in most of the nations about the planet.
Besides attacks on Saudi Arabian oil facilities, the rally in oil costs was fuelled mostly by the choice of OPEC and its allies not to improve production in April. Sriram Iyer, Senior Research Analyst at Reliance Securities, stated that the only aspect limiting upside was a stronger Dollar. The dollar has hit its highest because November on Friday. The oil rig count, an early indicator of future output, rose one to 310 in the week to March 5, power services firm Baker Hughes Co stated. CFTC information showed that speculators reduce their net extended US crude futures and alternatives positions by 3,323 contracts to 399,220 in the week to March 2. Yemen’s Houthi forces fired drones and missiles at the heart of Saudi Arabia’s oil business, such as a Saudi Aramco facility at Ras Tanura very important to petroleum exports.
Iyer added that technically, WTI Crude Oil has provided a fresh breakout above $67.00 level indicating a additional upside movement up to $67.90-$68.45 levels. Support is at $66.95-$66.10 levels. On the domestic front, technically, MCX Crude Oil will continue to trade on bullish momentum up to 4910-4970 levels. Support is at 4800-4735 levels, he added.