comex crude intraday

Crude Outlook July 17, 2008
17 July 2008 12:38:18

Oil extended Tuesday’s sharp fall, making a combined loss of over $10 on closing basis in two days, the biggest two-day drop in more than 17 years. A surprise rise in US crude inventories, concerns that slowing economic growth might dampen oil demand and OPEC’s downward revision of world oil-demand growth for 2008 and 2009 affected oil.

Light, sweet crude oil for August delivery in the New York Mercantile Exchange traded in the range $139.30 - $132.00, before settling at $135.10 a barrel.

US crude inventories rose 3 million barrels to 296.9 million barrels in the week ended July 11, according to the weekly inventory report by US Energy Information Administration released on Wednesday.

Federal Reserve Chairman Ben Bernanke in his testimony to the Senate Banking Committee said Tuesday that the US economy is facing significant risks to growth. According to a report to Congress submitted along with Bernanke's testimony, the Fed said that FOMC members were more uncomfortable about the inflation outlook at their June meeting than they had been at any point this year.

OPEC in its latest monthly report lowered its forecast for world oil-demand growth for 2008 to 1.03 million barrels a day, which represents a decline of 70,000 barrels from its previous estimate. Global oil demand this year is expected to average 86.81 million barrels a day.

Oil price had touched an all-time high of $147.27 a barrel on 11th July, and had been hovering near the level supported by geopolitical tensions in oil-rich countries such as Nigeria and Iran. A five-day strike started on Monday by workers of Brazil’s state-owned oil company Petrobras, which is expected to halt oil production of about 400,000 barrels a day, also supported oil price.

Iran reportedly test fired a number of missiles last week, including a long-range missile capable of striking Israel, sending a defiant message to the West and strengthening the view that Iran has no intentions of halting its uranium enrichment programme.

The Group of Eight leaders from Britain, Canada, France, Germany, Italy, Japan, Russia and the United States had warned that soaring oil and food prices pose a serious challenge to stable worldwide economic growth. They also called for diversifying sources of energy and further efforts to improve energy efficiency.

Potential supply threats due to geo-political tensions and the Atlantic hurricane season also continue to underpin oil prices.

Weekly Outlook (Crude oil NYMEX)

Continuation of uptrend expected above $147.50. Resistances $149.70, $154.80, $160.00; supports $142.60, $139.80, $132.00.

DWTI (July) traded in the range $139.10 - $132.16 and closed at $134.60 ($138.74).

TECHNICAL OUTLOOK (Intra-day)

DGCX Crude (July) - Bullish above 134.58; bearish below 133.95

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