comex crude oil intraday

Crude oil Outlook
29 May 2008 11:04:53



Oil prices bounced back to $131 levels yesterday, after falling below $126 due to profit booking by the traders from the recent rally. The market is awaiting the US Energy Department’s weekly inventory report, which will be released later today, for the latest updates on crude inventories.



Crude oil July in NYMEX settled at $130.82 ($128.25), after trading in the range $131.58 - $125.96.



Potential supply threats due to geo-political tensions, expected demand from China and OPEC’s unwillingness to increase output despite high prices continue to underpin oil prices.



Another attack on Nigerian oil facilities refocused concerns on immediate supplies. Production was partially disturbed after militants attacked a major oil pipeline owned by Royal Dutch Shell in the Niger Delta on Monday.



Meanwhile, Iran has cut its crude oil exports by 200,000 barrels a day since February 20 due to a seasonal fall in demand for crude oil during the refinery maintenance period. Iran is the world's fourth biggest oil exporter, currently producing around 4 million barrels a day, of which roughly 2.5 million barrels a day is exported.



Oil prices have soared by over 30 percent since the beginning of the year, extending a long-term rally that has seen prices more than double since the beginning of 2007, as market players weigh rising demand against concerns over production.



Expected strong energy demand from China after the Asian nation suffered a devastating earthquake last week and higher gasoline purchases from the United States ahead of the summer driving season have also boosted crude. On the supply side, ministers from the OPEC have indicated any output increase from the cartel remains unlikely, as it continues to blame record prices on speculation, geopolitical factors and the dollar's decline, rather than a lack of crude in the market.



DWTI (July) traded in the range $126.02 - $131.57 and closed at $130.99.

Weekly Technical Outlook

Expecting some correction if trades below 130.49. Supports are 128.30, 126.00; resistances are 133.22, 134.90. Otherwise likely to touch 137.97 and 140.88.



TECHNICAL OUTLOOK (Intra-day)

DGCXCrude (July) - Bullish above 130.10; bearish below 129.70

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