Energy: MCX

Energy: MCX November crude oil futures traded lower in the last week on account of lower global demand due to slow growth in China and Japan. US crude oil inventory increased more than expectation also added bearish market sentiments. As per Energy Information Administration (EIA), U.S. commercial crude oil inventories increased by 5.9 million barrels to 375.1 million barrels from the previous week. Total motor gasoline inventories increased by 1.4 million barrels and distillate fuel inventories decreased by 0.6 million barrels last week. Additionally, strength in dollar index also exerted downside pressure on crude oil price. Price movement in the last week: MCX November crude oil prices opened the week at Rs 4911/bbl, fell sharply and touched a low of Rs 4610/bbl and finally closed at Rs 4635/bbl (Thursday, October 25, 2012) with a loss of Rs 279/bbl (down 5.68%) compared with a previous week’s close. Outlook for this week: MCX November Crude oil is expected to trade lower on the back higher inventories coupled with lower global demand. Additionally, appreciation in the Indian rupee against the US dollar may exert downside pressure at domestic bourses. MCX November crude oil shall find a support at 4520 /4400 levels and Resistance 4790/4860 levels. Recommendation for this week: Sell MCX November Crude between 4770-4790, SL-4865 and Target- 4520/4450.