Energy

Crude-oil futures rose for a fourth day on Thursday to above $97 a barrel after government reports showed U.S. crude inventories fell for a sixth week and as geopolitical tensions escalated after former Pakistani Prime Minister Benazir Bhutto was assassinated.

U.S. crude inventories fell by 3.3 million barrels to 293.6 million barrels in the week ending Dec. 21, the lowest in nearly three years, U.S. Energy Information Administration reported on Thursday. Analysts polled by Dow Jones Newswires were expecting a drawdown of 1.2 million barrels.

U.S. crude inventories have fallen more than 20 million barrels since the week ending Nov. 9. U.S. is the world's largest crude-oil consumer, accounting for nearly a quarter of the world's production.

Pakistani opposition leader Bhutto died after a suicide bombing that also killed at least 20 others after a political rally in Rawalpindi, Pakistan. Pakistan, while not a significant oil producer, holds nuclear weapons, and the death of Bhutto could increase tensions in the region.

Weekly Crude Oil Inventory:

US Weekly distillate stocks: Actual -2.800m; Reuters Survey -0.800m; Prior -2.100m

US Weekly crude oil stocks: Actual -3.300m; Reuters Survey -1.000m; Prior -7.600m

US Weekly gasoline stocks: Actual 0.700m; Reuters Survey 1.600m; Prior 3.000m

Impact: Overall data is supportive for higher energy prices

MCX Crude Oil Jan (Daily Chart)



Technical Outlook:

Momentum studies have turned bullish; 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 increasing from over sold level, which is bullish and should support higher prices. The market's short-term trend is positive as the close remains above the 18-day EMA. The downside closing price reversal on the daily chart is somewhat positive.

Recommendations:

MCX Crude Oil Jan: sell at 3820-3830 for target of 3768 and 3706 with stop loss below 3865

MCX Natural gas Jan (Daily Chart)



Technical Outlook:

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

Recommendations:

MCX Natural Gas Jan: buy at Buy at 274-75 for the target of 285 and 290 with stop loss at 270.40

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