On the Comex, Brent Oil futures were trading at $90.420, down $0.180 or 0.200%.
After a strong rally, crude oil futures are witnessing some profit-booking at higher levels, but the overall trend remains positive, and a buy-on-dips strategy is recommended, analyst Anuj Gupta, Head Commodity & Currency at HDFC Securities, told ETMarkets. He suggests a buy at Rs 7,050 with a stop loss of Rs 6,950 and a target of Rs 7,300.
The prices are at 10-month high levels, the analyst informed.
Crude oil futures have gained 5.47% or Rs 377/bbl in September while the year-to-day gains stand at Rs 694 or 10.59%, Gupta said.
Analyst Prathamesh Mallya, Deputy Vice President, Research, Non-Agro Commodities & Currency at Angel One, believes that the uptick in prices is on the back of declining US inventories and sustained production cuts by Saudi Arabia and Russia, and the situation could remain as it is, going ahead.
Earlier, Reuters reported the US crude oil inventories were projected to fall by 5.5 million barrels in the week ending September 1, quoting market sources in the American Petroleum Institute. Official inventory data from the US Energy Information Administration is due at 11 a.m. EDT (1500 GMT) on Thursday.Mallya said that the price surged on Tuesday following the announcements of Saudi Arabia and Russia extending their voluntary oil supply reductions through the end of the year, with Saudi cutting 1 million barrels per day (bpd) and Russia reducing production by 300,000 bpd.
The cuts in production have been at the behest of OPEC+ members, who have agreed to continue reductions until the end of 2024.
Brokerage firm Geojit said that another leg of a bullish rally will begin once crude surpasses the $88 mark. The intraday outlook remains on the bullish side, and rallies would extend the day, the brokerage note said. It has, however, warned investors against slippages, hinting at weakness below the Rs 7,000 mark on the MCX.
It sees support at Rs 7,195/7,085/7,025 while resistance at Rs 7,365/7,425/7,535.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)