energy

Major Headline:

· World oil prices were lower in Asia Wednesday after fresh economic data in the US and Europe stoked concerns about falling demand.

· Prices have eased to around the $86.77 level at NYMEX, with rising stockpiles in America and fears of a global slowdown denting investor sentiment.

· MCX Crude Oil Feb registered a fall almost by 2% following international trend was trading below Rs 3440 per barrel.

· MCX Natural Gas Feb traded against the move and was up by almost 1 % , Market traded near 318.30 level with profit.

· The fall came after a widely watched survey showed the services sector of the US economy contracted for the first time in nearly five years in January.

· The Institute for Supply Management's index of non-manufacturing activity indicates that recession is at hand in the world's biggest economy.



Weekly Inventory Data:

· US crude inventories rose by far more than expected in the week to Feb 1, according to the US Energy Information Administration.

· Crude stocks rose by 7.0 mln barrels, against analysts' predictions for a 2.07 mln barrel rise.

· At 300 mln barrels, US crude oil inventories are in the middle of the average range for this time of year, the EIA said.

· Gasoline stock builds outstripped analysts' expectations, rising by 3.6 mln barrels against projections for a gain of just 1.7 mln barrels.

· Meanwhile distillate stocks, which include heating oil, also rose, gaining 100,000 barrels against expectations for a fall of 1.9 mln barrels.

· Heating oil remains in focus coming into the end of the peak winter demand period. Refineries meanwhile operated at 84.3 pct of their capacity, the EIA said, down 0.7 percentage points from 85 pct in the previous week.

· A nine-week fall in crude stocks over December and early January was a key factor in pushing crude stocks to an all-time high of 100.09 usd in the New Year.

Technical Outlook:

Momentum studies are still bearish but are now at oversold levels and will tend to support reversal action if it occurs. The daily stochastics have crossed over down which is a bearish indication. The stochastics indicators are decreasing from overbought level, which is bearish and should support lower prices. The market's short-term trend is negative as the close remains below the 9-day moving average. The upside closing price reversal on the daily chart is somewhat positive.

Recommendations:

MCX Crude Oil Feb: Sell at 3460-75 for the target of 3410 and 3380 with stop loss at 3495

MCX Natural gas Feb






Technical Outlook:

Momentum studies are still bearish but are now at oversold levels and will tend to support reversal action if it occurs. The daily stochastics have crossed over down which is a bearish indication. The stochastics indicators are decreasing from overbought level, which is bearish and should support lower prices. The market's short-term trend is negative as the close remains below the 9-day moving average. The upside closing price reversal on the daily chart is somewhat positive.

MCXARUN
9994500540