Crude oil accelerated more than 10 dollars to $82 a barrel mark to almost six-week high on optimism about the pace of global economic recovery and as cold weather across the United States boosted fuel demand.
Stunning records for cold were set across the nation, increasing the demand for heating fuels as the first seasonal wave of cold weather hits the Northeast and Midwest. The IEA, which advises 28 industrialized economies, said in a monthly report that it had increased its global oil demand growth estimate for 2010 to 1.42 million barrels per day, up 150,000 bpd from its previous projection.
Moreover oil producer group OPEC also raised its forecasts for world demand, predicting an average 28.39 million bpd next year, up 300,000 bpd from its previous forecast.
Elsewhere OPEC seaborne oil exports, excluding Angola and Ecuador, are expected to rise 90,000 barrels per day in the four weeks to Nov. 7, as British consultancy Oil Movements, said in its latest weekly estimate.
As per expectations, Crude oil was able to build ground at $65/bbl (its 200 Day EMA) last month and has thus appreciated quite steeply this month gaining around 20%. It has made a gradual transition from $60-70/bbl to levels of around $81.99/bbl.
At present levels of around $80/bbl, the counter still looks promising, as is depicted by the upward sloping trend channel, engulfing the whole move and setting higher targets as well of around Rs3950-4000/bbl in coming days.
The only clause is the level of $82/bbl in Nymex and Rs3800/bbl in MCX which is restricting upside at the moment(as there have been three failed attempts to cross that) , and can result in a corrective phase due to profit booking setting in after the recent rally.
It seems bears can push it lower only to be supported by Rs3550 and then by 3450/bbl in MCX and $75/bbl-$73/bbl zone in Nymex, so traders are advised to act accordingly.
Courtesy: Religare Commodities Want to get Futures prices on your mobile? Click here
