Crude oil futures witnessed a massive sell off today, breaking under $75 per barrel as traders booked profits ahead of the US weekly inventories data after gains in the last session. The Asian stocks ended mixed despite upbeat cues from the overnight US markets as intense volaltily in the currency markets kept the movement under check. The US Federal Reserve reported yesterday that industrial production rose 1.0% in July after having edged down 0.1% in June while factory output soared 1.1%—its biggest jump in nearly a year. This pushed up the DOW by nearly 1%, ensuring that the bulls are back into play for the risky assets. However, sell off in Chinese stocks and a massive correction in the share prices of the mining major BHP Billiton in Australia kept the gains under check, making it a fairly ordinary day for the region wide stocks. Crude oil went up for the first time in five sessions yesterday, following a strong set of economic data and excellent gains for the US stocks with the DOW rising by 1%.Benchmark crude for September delivery ended up at $75.77 on the New York Mercantile Exchange after approaching $76 levels earlier. The Housing starts in the US gained 1.7%, according to the Commerce Department's new residential construction statistics for July, at a seasonally adjusted annual rate of 546,000 versus the revised June estimate of 537,000. The industrial production also rose 1.0% in July after having edged down 0.1% followed by a generous uptick in factory output which soared 1.1%—its biggest jump in nearly a year. Crude was hurt in the after hours trade though as the American Petroleum Institute reported an unexpected build in oil inventories. The industry group said crude stockpiles rose by 5.9 million barrels last week, while gasoline stocks increased by 2 million barrels and distillates, which include heating oil and diesel fuel, saw a 2.1-million-barrel rise. Refinery utilization rose to 85.5% of capacity, from 84.2% last week. The US weekly inventories data from the EIA is due today and we expect the sideways activity to continue in the session. The commodity was last seen quoting at $74.94, down 83 cents from the previous close. MCX Crude oil futures for August tumbled under Rs 3500 per barrel mark to trade as low as Rs 3483 per barrel and currently trades at Rs 3496, down Rs 56 or 1.58% from the previous close.

Source