Crude oil prices on the MCX ended slightly higher as trader entered long after yesterday's solid losses and prices managed to hover just below the critical Rs 3700 per barrel threshold. The April contract, on the first day after the expiry of the March series on the MCX, witnessed excellent buying support even on a Saturday and lead to decent gains for the commodity.
The crude oil prices slipped sharply lower yesterday as the sticks fell, US dollar appreciated the profit booking ahead of the weekend took its toll. Crude settled at $80.68 a barrel on the New York Mercantile Exchange, down 1.9% after a run-up earlier this week when prices approached $84 a barrel.
Ongoing uncertainty over the handling of Greece's debt burden pressured the euro and lifted the dollar. A stronger dollar makes oil less attractive for holders of other currencies. The euro dropped as low as $1.3503, its worst level since the beginning of March.
Oil is having troubles to hold on near levels of mid 80's as lukewarm demand and ample inventories will continue to plague the energy market. Total petroleum inventories in the U.S. the world's largest consumer of oil, were up 10.2% over their five-year average in the week ended March 12.
MCX Crude closed at Rs 3689, almost at days high of Rs 3690. The counter had slipped slightly in the initial moves but then garnered buying support throughout the day. Next week promises to be a volatile one with the markets looking to assuage the pick up in the demand for the gasoline during the summer driving season. Global prices would continue to find $80 as the critical price level. MCX Crude oil is likely to witness good buying support around Rs 3648-52. A counter view would see buying getting stronger above Rs 3700.