Crudeoil on MCX settled down -2.64% at 3500 amid the continued tug of war between OPEC and the U. S. regarding production. The latest weekly American Petroleum Institute (API) inventory data recorded a draw of 5.0mn barrels, following a build of 1.5mn barrels the previous week and the consensus forecast was for much smaller draw of around 0.3mn barrels. The fuel inventories data was again important following the substantial builds reported last week. Gasoline inventories recorded a very substantial build of 9.75mn barrels, from 1.69mn barrels last week, while distillate recorded a smaller build of 1.17mn barrels. Overall fuel stocks recorded a third successive week of sizeable builds which will maintain concerns surrounding the risk of cuts in refinery runs and there is likely to be fresh uncertainty surrounding the strength of US demand given the increase in gasoline inventories. Concerns over rising US production also had a negative impact with the latest Energy Information Administration (EIA) report suggesting that shale production would increase in February. Higher US output would make it more difficult for OPEC to push prices higher. The latest data suggested that OPEC production edged slightly lower to 33.09mn bpd for December from 33.40mn in November ahead of planned cute to 32.50mn for January. Crude also remained vulnerable to an unwinding of long, non-commercial positions, especially given recent slippage in spot prices. Thursday's EIA inventories release will again trigger choppy trading conditions and fuel stocks will again be an important focus. Technically market is under fresh selling as market has witnessed gain in open interest by 3.74% to settled at 7902, now Crudeoil is getting support at 3458 and below same could see a test of 3417 level, And resistance is now likely to be seen at 3565, a move above could see prices testing 3631.

Trading Ideas:

Crudeoil trading range for the day is 3417-3631.

Crude oil dropped after the head of the International Energy Agency predicted a "significant" boost to U. S. output.

Sentiment in oil markets has been torn between expectations of a rebound in U. S. shale production and hopes that oversupply may be curbed

The IEA (International Energy Agency) said it expects higher oil prices to trigger a significant boost in U. S. shale output.