Crudeoil on MCX settled down -1.08% at 4403 on signals that Russia may exit production cuts. Losses were limited by a tightening of global supplies, as output has fallen in Iran and Venezuela amid signs the United States will further toughen sanctions on those two OPEC producers.
The Organization of the Petroleum Exporting Countries and its allies meet in June to decide whether to continue withholding supply. OPEC, Russia and other producers are reducing output by 1.2 million barrels per day from Jan. 1 for six months. OPEC's de facto leader, Saudi Arabia, is considered keen to keep cutting, but sources within the group said it could raise output from July if disruptions continue elsewhere.
Russian Finance Minister Anton Siluanov said over the weekend that Russia and OPEC may decide to boost production to fight for market share with the United States, but this would push oil as low as $40 per barrel. U.S. energy companies last week increased the number of oil rigs operating for a second week in a row. On the bullish side, the head of Libya's National Oil Corp warned that renewed fighting could wipe out crude production in the country.
Production has been also falling steeply in Venezuela due to U.S. sanctions. Technically market is under long liquidation as market has witnessed drop in open interest by -14.05% to settled at 13857 while prices down -48 rupees, now Crudeoil is getting support at 4379 and below same could see a test of 4355 level, And resistance is now likely to be seen at 4425, a move above could see prices testing 4447.
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