Crude oil futures rise Rs 61 a barrel on global cues

Russian oil

MCX Crude oil futures ended up 0.82% at Rs 3940 per barrel in last session.

On the other hand, benchmark Brent crude futures was down by 0.7 percent to $65.19 a barrel, after marking a one-week peak of $65.90 on Monday.

"Traders are extending last week's rally on the view that Russian Federation and Opec will maintain production ceilings this year even if inventories decline and the price rises further", said Ric Spooner, an analyst at CMC Markets in Sydney.

Brent's shortcomings was mainly due to the fall in Asian shares and a rising greenback potentially holding back demand given their ability to raise fuel cost for countries using other currencies domestically.

Suhail al-Mazroui, energy minister for the United Arab Emirates, told media of the alliance formation, saying OPEC was urging its members to build oil capacity buffers to temper any wild upswings in price due to the weak USA dollar this year.

However, higher United States production seems to be trying to restrain OPEC's efforts.

Oil prices fell on Wednesday, weighed down as the USA dollar moved further away from three-year lows hit last week.

That was largely due to soaring USA crude production, which has jumped by over 20pc since mid-2016 to more than 10m bpd, surpassing that of top exporter Saudi Arabia and coming within reach of Russian Federation, the world's biggest producer.

Elsewhere, there are more indications of inflationary pressures building in the US economy.

However, it also said that consensus forecasts among analysts indicated that concerns remain that rebounding prices will lead to USA shale producers ramping up supply.

USA inventory data also provided some support as it reported smaller than expected builds of 1.8 million. It hit its highest since January 26 at $1,355.50 on Wednesday, and has gained almost 4pc since it dropped to a one-month low last week.

Futures fell 1.1% in London. The preliminary reading on the consumer sentiment index for February came in at 99.9, up from the final January reading of 95.7. Saudi hinted last week that it was willing to see an undersupplied market. The more active April contract added 1.2 per cent to US$62.27. Volumes were massive with 39.4m ounces of April delivery gold traded.

WTI has gained more than 8 per cent since the end of November, when the Organisation of Petroleum Exporting Countries and its allies agreed to extend an output-curb deal until the end of this year. The yield on U.S. benchmark 10 year Treasury rose to a four year high of 2.9pc.

Retail and institutional investment in gold-backed exchange traded funds (ETFs) continues to grow.

So far this year North American gold investors have the led the charge with funds adding 21.5 tonnes worth $940m during the month or three-quarters of the global total. Platinum was up 0.2pc at $998.74, after earlier hitting $1,002.40.

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