NYMEX crude intraday

Oil could not sustain Monday’s gains, and fell to $120-levels in NYMEX, the lowest in more than a month.

Light, sweet crude oil for September delivery in the New York Mercantile Exchange traded in the range $125.85 - $120.42, before settling at $121.80 a barrel.

In market influencing news, the President of OPEC Chakib Khelil called oil prices abnormal and said they could pull back to $80 a barrel over the long term if the dollar were to continue to recover and global political worries eased.

Traders are awaiting Wednesday’s EIA report for update on US oil inventories.

Fresh attacks on Nigerian pipelines and comments by Iran's president raised concerns over global oil supplies had lifted the prices above $125 a barrel on Monday.

The President of Iran Mahmoud Ahmadinejad reportedly said that Iran has more than 5,000 active centrifuges for enriching uranium, keeping the focus on geopolitical concerns. The two-week deadline from world powers for Iran to give a final answer on its nuclear plans will end on Saturday.

A Nigerian militant group claimed on Monday to have attacked a couple of pipelines owned by Royal Dutch Shell.

Oil price had retreated from record high levels in the previous two weeks, weighed down by concerns that slowing economic growth might dampen oil demand. Easing of storm threat also added to the pressure. Tropical Storm Dolly did not have a major impact on oil and natural gas operations in the Gulf of Mexico. Early this month, OPEC had downwardly revised the world oil-demand growth for 2008 and 2009.

OPEC in its latest monthly report had lowered its forecast for world oil-demand growth for 2008 to 1.03 million barrels a day, which represents a decline of 70,000 barrels from its previous estimate. Global oil demand this year is expected to average 86.81 million barrels a day.

Oil price had touched an all-time high of $147.27 a barrel on 11th July but has corrected from there in the succeeding weeks.

Iran reportedly test fired a number of missiles in the second week of July, including a long-range missile capable of striking Israel, sending a defiant message to the West and strengthening the view that Iran has no intentions of halting its uranium enrichment programme.

The Group of Eight leaders from Britain, Canada, France, Germany, Italy, Japan, Russia and the United States had warned that soaring oil and food prices pose a serious challenge to stable worldwide economic growth. They also called for diversifying sources of energy and further efforts to improve energy efficiency.

Potential supply threats due to geo-political tensions and the Atlantic hurricane season also continue to underpin oil prices.

Weekly Outlook (Crude oil NYMEX)

Continuation of weakness expected below $119.80. Supports are $116.00, $110.00, $105.00. Otherwise expecting recovery; resistances $126.40, $132.00, $139.00.

DWTI (Aug) traded in the range $125.65 - $120.50 and closed at $122.19 ($124.73).

TECHNICAL OUTLOOK (Intra-day)

DGCX Crude (Aug) - Bullish above $122.80; bearish below $122.20

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