Oil prices closed higher yesterday at $77.01 per barrel mainly driven by a weaker dollar. Prices also rose on positive speculation over future oil demand after Japan, the third largest oil consumer in the world reported a better than estimated fourth quarter growth in its economy. All the economic data from US from empire manufacturing to Housing market index came positive for prices. DOE inventory report will be released on Thursday 18th Feb at 21:30 hrs (IST) as Federal offices in US were closed on account of Presidents day holiday seen on Monday (15th Feb). OUTLOOK: Trade balance data for euro zone in the afternoon is expected to show a surplus (though unchanged from previous month).The data may be slightly positive when compared with the trade surplus in Jan 2009. Data from US may show a rise in housing starts and a decline in building permits. Overall the data may be mixed to slightly negative for the economic outlook. Rising import prices is an indication for increased inflation or a weaker dollar. The data is expected to be good for oil prices to trade higher. Even US industrial production index is rising in January which is expected to support the positive outlook over future oil demand and subsequently higher oil prices. TECHNICAL RECOMMENDATIONS March Crude oil future prices shot up by gaining as much as 3.18% from the previous day close and after making a high of 3586 it settled at 3571 levels. Closing of the previous day candle renders upside movements for the day. However, the supports are at 3530 then 3500 levels sustain above the same may push the prices on higher note. Likewise, the resistances are at 3610 then 3645 levels. We recommend buying at lower levels.

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