Crudeoil on MCX settled down -0.36% at 3558 after data showed that oil supplies in the U.S. registered an unexpected inventory build. In its monthly oil market report, the IEA said output cuts announced by the Organization of the Petroleum Exporting Countries and 11 non-OPEC producers in November had "entered their probation period". January 1 marked the official start of the deal agreed by OPEC and non-OPEC member countries such as Russia in November last year to reduce output by almost 1.8 million barrels per day to 32.5 million for the next six months. The deal, if carried out as planned, should reduce global supply by about 2%.A monitoring committee charged with tracking adherence to the global deal is due to meet in Vienna for the first time on January 22. Barkindo said the stocks drawdown would help rebalance the market and establish the "equilibrium oil price" that will encourage investments in the sector after two consecutive years of capital expenditure cuts by state and private firms around the world. OPEC agreed to reduce output in tandem with non-OPEC Russia and several other producers in December, in the first such move in 15 years. Barkindo said he believed Russia was playing a long-term game with OPEC. "I have no doubts in Russia's commitment to continue to participate with us and solidify this platform effectively establishing a stabilizing forum for the short, mid and long-term," Barkindo said. Technically market is under fresh selling as market has witnessed gain in open interest by 82.19% to settled at 7896 while prices down -13 rupee, now Crudeoil is getting support at 3531 and below same could see a test of 3505 level, And resistance is now likely to be seen at 3594, a move above could see prices testing 3631.

Trading Ideas:

Crudeoil trading range for the day is 3505-3631.

Crude oil prices dropped after data showed that oil supplies in the U.S. registered an unexpected inventory build.

Crude inventories rose 2.3 million barrels in the week to Jan. 13, compared with expectations for an increase of 342,000 barrels.

World oil markets are slowly tightening as demand rises while investors wait to see if production cuts agreed by OPEC and other producers will be implemented as promised.