Crude oil turns positive on U.S. growth outlook; seems to be more bullish above 4895 levels

Crude oil prices reversed its previous day's losses, gaining by 0.56 per cent on Tuesday at the domestic markets on the back of concern that oil supplies from the North Sea and the Middle East could disrupted, and on demand prospects from the world's biggest oil consuming nation after US reported better-than-expected retail sales data yesterday.

At the Multi Commodity Exchange (MCX), Crude oil futures for October 2012 contract traded at Rs 4,852 per barrel, up by 0.41 per cent, after opening at Rs 4,848 against the previous closing price of Rs 4,832. It touched the intra-day high of Rs 4,870 till the trading. (At 02:58 PM IST today).

Sentiment improved after U.S. Census Bureau said that retail sales rose more than expected by a seasonally adjusted 1.1 per cent in September, beating expectations for a 0.8 per cent increase indicating stronger economic growth in US, world's largest consumer of crude oil and increasing the demand prospects for the commodity.

Moreover, a weaker dollar, which makes dollar-traded crude oil cheaper to investors using other currencies, also kept buyers in the market. The U.S. dollar index, a measure of the value of the United States dollar relative to a basket of foreign currencies, traded at 79.59, down by 0.20 per cent, against the previous closing of 79.74 on the Inter-Continental Exchange (ICE) at 03:00 PM IST.

Technically, crude oil has been trading in a range bound trend since morning in a range of 4844 and 4870. It has a minor resistance near at 4870 levels, and price could test the levels of 4895 once it breaks 4870 levels. However, crude has been trading its 100-day moving average level of 5065 for around one-month, which could be act as a major resistance near term and prices may be retreat from this level once. For intra-day, a buying opportunity would be exist above 4870 levels for targeting 4900 with strict stop loss below 4858.

Moreover, investors are monitoring the U.S. industrial production and housing market index data, which are schedule to release, at 06:45 PM and 07:30 PM, respectively. These data will determine the further direction to commodity market.

Read more about: bse, nse
Story first published: Tuesday, October 16, 2012, 23:31 [IST]
Please Wait while comments are loading...
Company Search
Enter the first few characters of the company's name or the NSE symbol or BSE code and click 'Go'

Thousands of Goodreturn readers receive our evening newsletter.
Have you subscribed?