Crude oil futures jumped to Rs 1,725 per barrel on May 5 as participants increased their long positions. Prices gained on expectations of the opening of many Asian and European countries as well as some US states that were shut due to the coronavirus pandemic.

India’s Petroleum Minister Dharmendra Pradhan on May 4 said in a Facebook post that the country has 32 million tonne of oil in tanks, pipelines and on ships, taking advantage of low oil prices to help the nation cut its import bill. The country imports 80 percent of its oil from abroad.

Crude oil is likely to take a further cue from the API data scheduled to be released later in the day.

Ravindra Rao, VP-Head Commodity Research at Kotak Securities, said the reopening of economies has triggered hopes of a recovery in demand and that is pushing oil prices higher. However, he warned that the recovery could be slow to pick up, which might cap gains.

Tapan Patel- Senior Analyst (Commodities), HDFC Securities, sees falling US oil rig counts and output cuts from OPEC+ nations lending support to the current recovery in crude oil prices.

He expects WTI June Crude Oil June futures to face resistance near $24 and support at $18. "MCX May Crude Oil futures has support at Rs 1,580 and resistance at Rs 1,850."

Rao added that WTI June Crude Oil futures may face stiff resistance near $23.50-24/bbl and does not rule some profit taking.

In the futures market, crude oil for May delivery touched an intraday high of Rs 1,741 and an intraday low of Rs 1,600 per barrel on the MCX. So far in the current series, black gold has touched a low of Rs 796 and a high of Rs 3,905.

Crude oil delivery for May rose 170, or 10.93 percent, to Rs 1,725 per barrel at 15:23 hours IST on a business turnover of 7,781 lots. The same for June delivery jumped Rs 168, or 9.58 percent, to Rs 1,921 per barrel on a business volume of 1,283 lots.

The value of May and June contracts traded so far is Rs 923.31 crore and Rs 37.90 crore, respectively.

West Texas Intermediate crude gained 10.15 percent at $22.46 per barrel, while Brent crude, the London-based international benchmark, rose 7.87 percent to $29.34 per barrel.