Crudeoil on MCX settled down -0.77% at 3339 as abundant crude supplies outweighed tighter U.S. fuel inventories and OPEC's plans to cut output. Brent crude reached a 2016 high near $54 on Monday, underpinned by OPEC's Sept. 28 deal to reduce oil production, before weakening on rising U.S. crude stocks and as the Organization of the Petroleum Exporting Countries' own numbers showed output is still rising. U.S. crude inventories overall rose by 4.9 million barrels, the first increase in six weeks, the government's Energy Information Administration reported. But stocks at the Cushing delivery hub for U.S. crude futures declined and U.S. inventories of distillates, which include diesel and heating oil, fell by 3.7 million barrels. U.S. crude's structure gained support from the extended outage of a pipeline capable of delivering 450,000 barrels per day of crude into Cushing. OPEC's plan is to cut its supply to between 32.5 million barrels per day (bpd) and 33 million bpd to help to balance supply and demand and revive prices that remain less than half of the levels reached in mid-2014. Separately, Crude prices could also remain under pressure due to the stronger U.S. dollar, which was boosted after the minutes of the Federal Reserve's September policy meeting released on Wednesday showed several voting members of the policy committee judged a rate hike would be warranted "relatively soon" if the U.S. economy continued to strengthen. Technically market is under long liquidation as market has witnessed drop in open interest by -13% to settled at 14023 while prices down -26 rupee, now Crudeoil is getting support at 3307 and below same could see a test of 3274 level, And resistance is now likely to be seen at 3394, a move above could see prices testing 3448.

Trading Ideas:

Crudeoil trading range for the day is 3274-3448.

Crude oil dropped as abundant crude supplies outweighed tighter U.S. fuel inventories and OPEC's plans to cut output.

OPEC reported that its oil production rose in September to its highest level in eight years and pointed to a larger surplus next year.

U.S. crude's structure gained support from the extended outage of a pipeline capable of delivering 450,000 barrels per day of crude into Cushing.