India crude oil under pressure on global supply concerns

Last Updated : January 06, 2012 14:10

Crude oil futures traded lower or in the tight range to settled flat to weak down by -0.35% at 5443 on climbing US supplies despite Iranian supply disruption worries.

Dollar strength generally depresses commodity prices, as it decreases their appeal as an alternative asset and makes dollar priced commodities more expensive for holders of other currencies.

The US EIA reported that US Crude Oil inventories climbed by 2.2mbls in the week ended Dec 30th, crushing estimates for a 1.2mbl decline. Meanwhile, the euro zone has agreed on principle to begin an oil embargo against Iran per a diplomat. However, the details of the potential embargo remain uncertain.

This fear added support to recent crude oil prices. France came into danger of losing its AAA credit rating after investors adding to euro zone crisis fears.

But losses were limited amid lingering concerns over a supply disruption concerns as a result of escalating tensions between Iran and the West. A EU diplomat said that EU countries had agreed on principle to launch an oil embargo on Iran, but discussion were to continue over details such as timing and implementation.

Now technically market is trading in the range as RSI for 18days is currently indicating 63.48, where as 50DMA is at 5163 and crude is trading above the same and getting support at 5408 and below could see a test of 5374 level, And resistance is now likely to be seen at 5471, a move above could see prices testing 5500.

Trading Ideas:

Crude trading range is 5374-5500.

Crude oil held on to losses after government data showed crude supplies rose unexpectedly last week.

Crude prices came under additional pressure as concerns over the euro zone?s debt crisis lingered.
A EU diplomat said that EU countries had agreed on principle to launch an oil embargo on Iran.

Courtesy:Karvy Comtrade Ltd.

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MCX ALUMINI 30 March 2012 contract was trading at Rs 108.3 , up Rs. 0.1 . What's your view on it?

Source: http://www.commodityonline.com/futures-trading/commoditytrends/India-crude-oil-under-pressure-on-global-supply-concerns-10616.html

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