ENERGY intraday

Crdue Oil trades higher on speculative buying
30 June 2008 10:41:45

Oil prices jumped to record high levels above $142 a barrel on Friday, as the US currency weakened further and stock markets tumbled at the end of a volatile trading week for investors. New York light sweet crude struck a historic peak of $142.26 a barrel and Brent North Sea crude reached an all-time high of $142.13 in electronic deals.

World stocks fell to a three-month low as a fast deteriorating global inflation picture intensified concerns over the outlook for corporate profits, hastening the rush of investors' funds into commodities. 40 percent surge in oil prices this year has prompted U.S. politicians to take steps to try to curb speculation in the oil market, that some blame for pushing up prices.

Weakness in the U.S. dollar has almost become a "self-fulfilling prophecy", a scaling back of U.S. rate expectations has pushed the dollar lower, encouraging gains in the oil price and in turn exacerbating worries over inflation and the outlook for the U.S. economy.

Moreover, the dollar could be set to "lose ground rapidly" next week in the event of a combination of negative factors for the currency, namely a rate hike in the euro zone, further weak U.S. data and poor liquidity ahead of the July 4 holiday in the U.S.

Crude also got a leg up after Libya threatened an output cut. Shokri Ghanem, chief of Libya's national oil company, reiterated his Sunday comments that Libya "sees a possibility for a decrease in production.

The U.S. House of Representatives on Thursday approved legislation which directs the Commodity Futures Trading Commission (CFTC), the futures market regulator, to use all its authority including emergency powers to "curb immediately" the role of excessive speculation in energy futures markets, Talks between oil workers and Chevron continued in Nigeria, with the oil minister saying he was confident a deal could be reached, but union officials left open the possibility of a strike early this week.

Natural gas in New York gained as rude oil rose to a record and on speculation lower stockpiles ill push prices higher later this year. Declining imports of gas from Canada and reduced supplies of liquefied natural gas have increased speculation of a possible supply crunch next winter and higher prices

Higher oil prices have also made natural gas cheaper on a relative basis, prompting those seeking a bargain to buy. On an energy equivalency basis, oil used to heat buildings and run power plants traded at a premium to gas in New York of about 39 percent.

MCX Crude Oil July - Technical Outlook:

The daily stochastic have crossed over up which is a bullish indication. The stochastic 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 EMA. The downside closing price reversal on the daily chart is somewhat negative.

Recommendations-MCX Crude Oil July: Buy at 5985 Target 6040 and 6120 Stoploss 5935

MCX Natural gas July - Technical Outlook:

The daily stochastic have crossed over up which is a bullish indication. The stochastic 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 EMA. The downside closing price reversal on the daily chart is somewhat negative.

Recommendations-MCX Natural Gas July: Buy at 564 Target 569 and 576 Stop loss at 559

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