Energy

Crude oil traded near the record of $100 a barrel in NYMEX and Rs. 3931 in MCX on concern that violence in Nigeria may disrupt supply as global demand for commodities climbs.

Nigerian militants killed 12 people in the oil city of Port Harcourt on Jan. 1. Violence has curbed daily output in Africa's biggest oil producer by almost a quarter.

Gold surged to a record yesterday as the dollar's slump against major currencies enhanced the appeal of commodities as a hedge against inflation.

Rising energy prices were cited as a contributing factor in disappointing sales for the just-ended holiday season, along with the continuing slump in housing and an overall uneasiness about the economy. But economists say that generally, the jump in oil is less devastating than previous spikes because incomes have risen faster than energy costs.

The U.S. Department of Energy (DOE) said that crude oil supplies were down 4.0 million barrels last week to 289.6 million barrels. 900,000 barrels of crude oil were also added to the Strategic Petroleum Reserve. Supplies of gasoline were up 1.9 million barrels while heating oil supplies were down 1.4 million barrels.

The DOE also said that refinery use picked up from 88.1% to 89.4% of capacity last week. Over the past four weeks, gasoline demand was up .1% from a year ago while distillate demand was up 5.7% from a year ago.

The U.S. Energy Department's weekly inventory report will be released on Friday for natural gas due to the holiday schedule.

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: Buy at 3900 for target of 3960 and 3990 with stop loss below 3855



MCX Natural gas 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 Natural Gas Jan: Buy at 305-307 for the target of 315 and 325 with stop loss at 297