MCX February crude oil

Crude: MCX February crude oil futures swung between gains and losses in the last week. On one hand, crude oil futures fell on account of as New York Fed manufacturing index reported contraction for the sixth month, U.S. debt ceiling issues and European recession fears. On the other hand, crude oil prices traded higher as the Organization for the Petroleum Exporting Countries (OPEC) cut its’ production to 14 months low on lower demand concerns as stimulus measures in Japan, Europe and fiscal cliff issues in U.S. struggle to boost growth. The Organization of Petroleum Exporting Countries cut output by 465,000 barrels a day in December to 30.4 million, the lowest since October 2011, led by a reduction in Saudi Arabia. The U.S. Energy Information Administration (EIA) showed a draw down almost a million barrel in its’ weekly inventory report also supported prices to take up Wednesday. As per the US Energy Department (EIA) report last night, US crude oil inventories declined unexpectedly by 951,000 barrels to 360.30 million barrels for the week ending on 11th January 2012. Price movement in the last week: MCX February crude oil prices opened the week at Rs 5179/bbl, initially traded slightly higher but found strong resistance of Rs 5232/bbl, later prices came under pressure and currently trading at Rs 5172/bbl (January 18, Friday, 5.50 PM) with a nominal loss of Rs 4/bbl as compared with a previous week’s close. Outlook for this week: MCX February crude oil is expected to trade higher on account of reduced crude oil production by Saudi Arabia coupled with positive economic data from US and China. MCX February crude oil shall find a support at 5090/5040 levels and resistance 5235/5285 levels. Recommendation for this week: Buy MCX February Crude Oil between 5090-5100, SL-5035 and Target- 5232/5280.