MUMBAI (Commodity Online): MCX March Crude contract opened down at 3695 vs. previous close of 3704 made an intraday high at 3707 and presently at 6.10 pm Crude at MCX traded at 3691 down by 13 rupees.
14 days RSI for MCX Crude Mar contract is at 54.57 levels and it shows downtrend.
“Technically, Crude looks bearish and range for MCX Crude is from 3500-3725,” said Shyamal Mehta, Sr. Commodity Analyst with Commodity Online. Presently Crude prices are trading below 4, 9 and 14 day weighted moving averages which signals downtrend. Crude prices are likely to fall further and may test 3650-3630 levels on as demand seen falling.
Support for the Crude is seen at 3660 and below could see a test of 3630. Resistance is now likely to be seen at 3730, a move above could see prices testing 3760.
Crude oil prices tread water for the week as uncertainty about demand continued to weigh on the market.
Not even relatively bullish forecasts for oil demand, such as the International Energy Agency’s report on Friday raising its forecast by 70,000 barrels a day for 2010, or the decline in the dollar could propel oil prices forward.
Moreover, Stöferle notes, OPEC seems to prefer a price between $70 and $80 a barrel to keep unconventional sources such as shale oil and oil sands, or alternative energy sources like solar and wind, from becoming economically competitive.
Oil prices could rise further in the first half of this year, even hitting $100 a barrel, but will average only $72 a barrel over the second half due to weak demand and other factors. The IEA’s forecast for an increase of 1.6 million barrels a day in crude oil demand this year to 86.6 million barrels a day was quickly eclipsed by another report on Friday.
