nymex crude outlook

Oil prices fell yesterday and traded near to three month low and closed at $119.17 a barrel with oil operations in the Gulf of Mexico starting to return to normal as Tropical Storm Edouard moved inland after striking the Texas coast. Sign of increased OPEC output and the threat to demand from economic slowdown also affected the crude movement.

Light, sweet crude oil for September delivery in the New York Mercantile Exchange traded in the range $121.23 - $118, before settling at $118.58 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.

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.


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.

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.

NYMEX Crude Oil September

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 $121.13 - $118.15 and closed at $119.17.

TECHNICAL OUTLOOK (Intra-day)

DGCX Crude (Aug) - Bullish above $119.40; bearish below $118.9

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