With the price of Russian oil capping and the currency weakening, crude oil prices rose last week. In addition, for the week ending November 25 in the United States, the commodity energy was drawn from stocks at a higher rate than anticipated. In contrast to the predicted loss of just under 3 million barrels, the Energy Information Administration reports that the U.S. oil stocks decreased by 12.6 million barrels. Brent crude futures on the Intercontinental Exchange (ICE) increased, as a result, closing at $85.6 a barrel, up 2.2 percent.
The MCX crude oil futures (continuous contract) also saw gains, rising 3.8% to conclude the week at $6,548 a barrel. The price cap on Russian crude oil, set at $60 by the G7 and the EU, may prevent the price of crude oil from rising, as it is higher than the price of Russian Ural crude on the current market. As a result, the supply will keep flowing, and the threat of a crunch seems to have diminished. Nevertheless, the outcome of the OPEC+ meeting on December 4 needs to be closely watched because any big actions taken by them can have a significant impact on the dynamics of supply and demand.
Even while Brent futures rose last week, they were unable to break over the $88-90 resistance range. The contract is finding support at $82, even if the rally is probably going to be capped. Therefore, there is a likelihood that Brent futures may short-term consolidate between $82 and $90. The price range of $98–100 serves as resistance over $90. Support levels beneath $82 are $76 and $65.There was significant short covering last week on the MCX contracts as the price of crude oil rose. While the cumulative Open Interest (OI) decreased during the past week from 18,805 to 10,984 contracts, the December futures rose by 3.8 percent.
If the price increases and the OI decreases, this suggests short covering. Given that the contract is still trading below the significant resistance levels of 6,750 and 7,000, this is hardly a sign of a positive reversal. The short-term view could turn bullish with a breach of 7,000. Despite the significant selling pressure experienced in the second part of November, the support level of 6,300 remains strong. Despite hitting a low of $6,052 on Monday, the December contract quickly recovered to end the session above $6,300.