Ahead of oil producers’ meet, bears up the ante

MUMBAI: The top 10 bears in crude oil on commodity bourse MCX don’t seem to believe that a meeting on an output freeze between OPEC and non-OPEC members next Sunday will yield fruit. This even as crude spurted by almost 6% on Wednesday, after comments by Opec’s governor Nawal Al-Fuzaia that Opec and non-Opec producers could agree to freeze output without Iran at a meeting in Doha on April 17.

The top-10 shorts — as they are called — raised bearish bets by a cumulative 196 contracts (19,600 barrels) to 13,014 contracts on Wednesday after the most active contract expiring on April 19 rose by 5.67% to Rs 2,515 a barrel, tracking the contract and adjusted for currency on Wednesday. The top-10 bulls in crude, or longs, cut positions, or booked profits, by a cumulative 23 contracts or 2,300 barrels to 8,399 contracts cumulatively.

Together both longs and shorts hold 52% of open interest on crude on MCX. The shorts’ position build up runs contrary to brokers’ calls to initiate fresh bullish bets until April 17. Harish Galipelli, head of commodities, Inditrade, advises a buy at Rs 2,500 for a target of Rs 2,800 before April 17. He advises placing a stop loss below Rs 2,350.

Gnanasekar Thiagarajan, director, Commtrendz, expects price to trade in a “positive” bias in a Rs 2,450-2,700 range. Suresh Nair, director, Admisi Commodities, also predicts bullishness on hopes of a production freeze by Saudi Arabia, Russia, Venezuela, Qatar, etc.