Crude Outlook – 12th Nov, 2008

U.S. crude futures settled on Tuesday below $60 a barrel for the first time since March 2007 as demand concerns due to the ailing world economy .Crude futures fell sharply even after a fresh indication from OPEC of another output cut.

China's stimulus packages also failed to hold energy prices at higher levels. China launched an economic stimulus package on Sunday worth nearly $600 billion for supporting ailing economy. This plan is for 2 years and Funds from the stimulus package will be spent in ten major areas that include low-income housing, rural infrastructure, water, electricity, transportation and improvements in the environment. And also expected it will improve the current global economic condition by improving the domestic demand.

In the last week, Crude oil fell to a 22 month low of $59.97 and ended at $61.33 a barrel as concerns about a slowing global economy curbing already slowed oil demand. The falling in oil also supported by the surprise report of a build in U.S. gasoline inventories, which indicated that demand remains weak and crude inventories were flat after five consecutive reports of builds at 0.50 mln barrels. U.S. total oil product demand in the past four weeks fell to 19.10 million barrels per day, down 6.7 percent from a year ago, the EIA reported.

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.

Light, sweet crude oil for November delivery in the New York Mercantile Exchange traded in the range $58.60 - $62.1, before settling at $59 a barrel yesterday.

Weekly Crude Oil (DWTI NOVE.)

Expected to trade within the range of $ 63.10 to $59, breaking of either a side makes the direction, Resistances are $65.60 $69, $71.30, Supports seen at $57.20, $53.60 and$ 49.80.

DWTI (November) traded in the range $61.10 - $58.70 and closed at $59.33

TECHNICAL OUTLOOK (Intra-day)

DGCX Crude (November) - Bullish above $59.78; bearish below $59.30


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