Energy intraday

· Oil hovered near 99 usd per barrel, weighed slightly as falling equity markets reignited worries over lower demand but geopolitical tensions in the Middle East lent some support.

· Prices have been volatile so far today, amid a mixed fundamental supply/demand backdrop. While swelling US inventory reported yesterday saw prices lower this morning, tension between Turkey and Iraq -- which could end up harming supply -- lifted crude's value later in the session.

· Meanwhile, the threat of lower demand as equity markets tumbled was still prevalent. Oil and another commodities have tracked equity markets in recent months, with some players worried further falls on the stock markets could mean lower demand ahead. US Stocks fell today as investors with little news to trade on after Thursday's pullback kept selling ahead of economic figures due next week.

· On the political side, Turkish troops have entered northern Iraq to hunt Kurdish separatist rebels after fighter jets struck at their bases, the Turkish army said Friday.

· Some 10,000 troops penetrated 10 km (six miles) into the crude-rich autonomous Kurdish northern Iraq, the NTV news channel said.

· In the meantime, Iraqi exports through the north have been suspended. Citigroup analyst said the Turkish incursion was merely giving the market a psychological lift, adding that US supply, especially for gasoline, was not tight.

· Prices had started the day lower because yesterday's US Energy Information Administration said crude stocks rose for the sixth consecutive week, this time by 4.2 mln barrels in the week to Feb 15, shocking traders who had expected crude inventories to rise just 2.6 mln barrels. Gasoline stocks, meanwhile, rose to their highest level since February 1994.

· Earlier this week, however, oil hit a record 101.32 usd per barrel as investment into commodities surged. Such investment is not likely to leave the market just yet, some analysts said.

· Strength in prices across commodities indicates that the rally is likely fuelled by fresh inflow of capital as investors see commodities as an alternative asset class," said Bank of America analysts. Elsewhere, gold and platinum were close to record highs.

· Looking ahead, consumer pressure on OPEC to release more oil at its March 5 meet is likely to grow, but the cartel has repeatedly insisted it is not to blame for the high price. In the group's last two meetings since December 2007 OPEC ministers have chosen to keep production steady at 29.67 mln bpd.

MCX Crude Oil March

Technical Outlook:

Momentum studies are bullish but are now at overbought levels and 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 rising from oversold level, which is bullish and should support higher prices. The market's short-term trend is positive as the close remains above the 9-day moving average. The downside closing price reversal on the daily chart is somewhat negative.

Recommendations:

MCX Crude Oil March: Buy at 3845-50 for the target of 3990 and 4025 with stop loss at 3810

MCX Natural gas March

Technical Outlook:

Momentum studies are bullish but are now at overbought levels and 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 rising from oversold level, which is bullish and should support higher prices. The market's short-term trend is positive as the close remains above the 9-day moving average. The downside closing price reversal on the daily chart is somewhat negative.

Recommendations:

Natural gas March: Sell at 376-79 for the target of 365 and 358 with stop loss at 387

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