DGCX Crude oil futures extended the rally on Thursday also backed by weaker Dollar however failed to sustain the gains and gave up most of the gains made in earlier sessions. The most active September futures finished the day at $70.52, up by $0.36 from previous close.
After a firm opening, Oil prices surged to an intraday high of $72.21 taking cues from weak USD against other major currencies. Any decline in Dollar value will make Crude oil cheaper for importing nations there by pushing them to purchase more oil. However it failed to sustain the gains as a surprise fall in US advance retail sales has once again renewed concerned about the recovery in world’s largest economy.
Overall trend remains positive and performance of Dollar and equity markets world wide is continue to provide the direction for Crude oil prices in short term.
Outlook
Market’s inability to sustain the gains is signaling caution in short term with chart formation suggesting some increased consolidation between $68-72. For the day we expect market to move in sideways with support at $70, Resistance is seen at $72.20.
