MCX crude oil to remain higher on inventory concerns

Crude oil futures briefly pushed above the $100/barrel mark to settled with a gain of +1.03% at 5268 on MCX due to sharply lower inventories and strong US leading indicators.

Slight weakness in the US dollar helped push crude prices higher. Dollar weakness normally helps commodity prices, as it increases their appeal as an alternative asset and makes dollar priced commodities less expensive for holders of other currencies. Jobless claims in the US dropped by 4k last week and leading indicators beat forecasts.

Meanwhile, US oil supplies hit decade lows fueling the bullish advance. Meanwhile, prices continued to draw support from a potential disruption to Middle Eastern oil supplies.

A series of at least 14 coordinated bombings hit Baghdad earlier in the day, killing at least 57 people. The bombings come just days after the last US troops left the country, renewing fears over sectarian violence between Sunni and Shia Muslim groups. Iraq pumped nearly 2.57mbls of oil per day last month.

Lingering concerns that the West would impose tougher sanctions on Iran over the country?s nuclear program also lent support.

Iran is the world's fourth largest oil producer, pumping nearly 5% of the world's oil in 2010. Now technically market is trading in the range as RSI for 18days is currently indicating 59.58, where as 50DMA is at 4987 and crude is trading above the same and getting support at 5226 and below could see a test of 5183 level, And resistance is now likely to be seen at 5293, a move above could see prices testing 5317.

Trading Ideas:

Crude trading range is 5183-5317.
Crude oil briefly pushed above the $100 per barrel mark due to sharply lower inventories and strong US leading indicators.
Crude can see pressure as government data showed that US economic growth was slower than previously estimated Q3.
Lingering concerns that the West would impose tougher sanctions on Iran over the country?s nuclear program also lent support.

Courtesy: Kedia Commodities

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Source: http://www.commodityonline.com/futures-trading/commoditytrends/MCX-crude-oil-to-remain-higher-on-inventory-concerns-10448.html

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