Crude oil prices fell 1.4% in the last week to close at $76.46/bbl. Prices came under pressure despite a weaker dollar as data indicated a rise in inventories. The US Energy Department showed a rise of 1.8 million barrels in crude oil stocks last week. Gasoline inventories rose 2.56 million barrels to 210.8 million, higher than a forecast drop of 350,000 barrels. There has been a sharp build up in inventories and this factor led to the sell-off in crude oil. US refinery operating capacity fell 0.7% from the prior week. It has been the slowest pace since September 2008, when units were shut because of Hurricanes Gustav and Ike.
The focus in this week will again remain on the inventory levels as the demand scenario is very important for providing further direction to prices.
Nymex December Natural Gas futures ended in the green on Friday, to close at $4.400/ mmbtu mark.
OUTLOOK
Oil prices touched a low of $75.57/bbl in the last week and have declined sharply from its high of $81.99/bbl touched three-weeks ago. There is uncertainty over crude oil demand from the US and until there is further clarity on that front price could remain under pressure. The rally in prices was mainly backed by the weakness in the dollar which could still continue to provide support to a sharp downside in prices. Fundamentally, the rally in prices was not supportive and hence this correction was overdue. We expect prices to trade in the range of $75.50 - $79.80/bbl this week, facing resistance around $80/bbl levels.
Today, we could witness sideways move in crude oil prices with support for NYMEX Dec Crude Oil is seen at $75.45/$74.70 level a resistance at $77.65/$78.65 levels.
