Energy intraday

· Oil was steady near a record hit earlier as investors favoured holding commodities, especially crude, as safe assets in the midst of global economic turmoil.

· New York's main WTI benchmark hit a record 109.72 usd this morning as the dollar slumped to a record low against the euro. The price briefly fell to a day low of 107.43 usd as the greenback later trengthened against major currencies after central banks announced coordinated central bank action to shore up liquidity.

· Crude oil has become linked to the greenback's value, as it becomes relatively cheap or more expensive for those trading in other currencies when the dollar moves.

· Oil prices have soared over 100 pct since mid-January 2007. Analysts agree that supply/demand balance has got tighter but they say the latest rally, which has seen WTI rise 15 pct in one month is mostly down to speculative interest from investors keen on diversifying their portfolios amid economic turmoil.

· International Energy Agency (IEA) today reduced its demand forecast slightly for this year by 100,000 bpd, which was widely expected, because of downward pressures from weaker economic growth in the OECD.

· The agency, an advisor to 27 industrialised nations, cut its forecast for 2008 demand by 80,000 barrels a day to 87.54 mln bpd, leaving annual demand growth at 2 pct, in a monthly report.

· Most analysts agree that demand is likely to take a hit if market weakness persists, but this belief is doing little to stop the crude oil price rally for now.

· Citigroup analyst Tim Evans warned, however, that current higher prices could end up destroying demand.

· Looking ahead, the US Energy Information Administration (EIA) will release its weekly inventory numbers tomorrow, which could provide some price direction.

· Early estimates show analysts expect crude stocks in the world's top consumer to have risen last week and gasoline stocks fell for the first time in eighteen weeks.

MCX Crude Oil March

Technical Outlook:

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

Recommendations:

MCX Crude Oil March: Buy at 4330 Target 4420 and 4500 Stop loss 4280

MCX Natural gas March

Technical Outlook:

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

Recommendations:

MCX Natural Gas March: Buy at 400 Target 410 and 415 Stop loss 396.80

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