energy

Crude-oil prices surged sharply after some delegates of the Organization of Petroleum Exporting Countries said the cartel should cut production to support the prices. Production stoppages in North Sea and Africa also continued to support the prices. Crude oil for March delivery on NYMEX soared $3.66 to end at $91.77 a barrel.

· MCX crude closed higher today and posted an increase of 3.2 per cent over the week. MCX crude surged this week tracking the upturn movement on international exchange. Nymex crude surged 3.2 per cent this week after sliding 1.9 per cent in the previous week.

· Nymex crude rallied 4.2 per cent yesterday, the biggest one day rise since Dec 12, to settle at the highest price since Jan 30. Nymex crude rose sharply yesterday on supply jitters related to Nigeria and Venezuela, expectations of higher demand for heating fuels as colder weather is forecasted in U.S. Northeast this weekend, speculation that OPEC will cut output at it March meet and reports that North Sea crude oil shipments may fall in March.

· MCX gas closed weaker today but noted an increase of 6.6 per cent over the week tracking the upturn movement on international exchange. Nymex gas surged 7.2 per cent this week after falling 2.7 per cent in the previous week.

· Nymex gas jumped 2.5 per cent Friday to settle at the highest price since Jan 14. Nymex gas surged for the fifth day yesterday supported by sharp rise in crude oil futures and expectations that heating demand may increase as colder weather is forecasted for U.S. Northeast and Midwest in the near term.

· Recent build up in US crude oil inventories and lower demand during shoulder period is likely to induce OPEC to cut production in its forthcoming meeting on 5th March. Some deligates of the cartel have already given signals for the same recently.

· Halt in crude oil production in Nigeria and North Sea is also lending some support to the crude oil prices. Royal Dutch Shell said Thursday it was halting 130,000 barrels per day of Nigerian output because of pipeline leaks. The oil supplies from Africa's biggest oil producer and a major U.S. supplier is likely to fall due to the nation's deteriorating security situation and planned maintenance.

· The crude oil prices also rose on news that North Sea oil production has been cut by 280,000 barrels a day due to technical problems at a Total SA oil field, and that Russian crude output could fall this year due to the depletion of a large oil field.

MCX Crude Oil Feb (Daily Chart)



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 Feb: Buy at 3580 for the target of 3660 and 3730 with stop loss at 3535



MCX Natural gas Feb (Daily Chart)



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:

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