Crude oil futures soared by more than 2.5 per cent in the domestic market on Tuesday as investors and speculators booked fresh positions in the energy commodity tracking a firm trend in the overseas market as traders eyed Wednesday’s US storage data which may show that crude oil stockpiles may have retreated last week, easing concerns over a global supply glut.
US crude oil stockpiles had fallen by 5.9 million barrels in the week ended December 18, the biggest drop since June.
Sharp losses in the fuel in the previous session when crude prices tumbled by over 3 per cent amidst worries over a global supply glut due to rising OPEC production and the impending addition of millions of barrels of Iranian oil, offered good bargain buying opportunity in the fuel.
Signs of a pickup in the world’s biggest economy also bolstered the demand outlook for the fuel as US consumer confidence rose in December and home price gains accelerated in October. Home prices in 20 US cities climbed 5.5 per cent in October 2015 from the same month a year ago, after an annual 5.4 per cent advance in September 2015. The gauge measuring US consumer confidence climbed to 96.5 in December from 92.6 in November.
Oil may retreat today after the API said that US crude stockpiles climbed by 2.9 million barrels last week.
At the MCX, Crude oil futures, for the January 2016 contract, closed 2,514 at Rs per barrel, up by 2.7 per cent, after opening at 2,452, against the previous close price of Rs 2,447. It touched an intraday high of Rs 2,625.
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