Crude oil falls to $72.43, awaits US inventory data

Crude oil prices declined on Tuesday and touched a low of $72.43/bbl as a stronger dollar exerted pressure on prices. But oil prices managed to close above yesterday’s low as the American Petroleum Institute (API) indicated that crude oil inventories slipped by 5.82 million barrels last week. Gasoline supplies also fell 753,000 barrels last week as per the API data.

Oil prices will take further cues from today’s inventory data by the US Energy Department which is expected to show a rise in crude oil stockpiles by 250,000 barrels. Ahead of this data release prices could remain under pressure but will take further cues from the data which is expected to be released at 9.00 p.m. IST.

But a sharp upside in oil prices could be under check as the demand scenario in the US still remains bleak and this poor fundamental could prevent a sharp upside.

The following factors could limit the upside in crude oil prices:

Oil prices are expected to trade with a negative bias as demand worries in the US still persist. The US Energy Department is expected to show a rise in crude oil inventories by 250,000 barrels. Gasoline inventories are forecast to rise 1.6 million barrels for the last week. Supplies of distillate, a category that includes heating oil and diesel will probably show a decline of 750,000 barrels from 165.7 million the prior week.

Today, we could witness sideways move in crude oil prices with support for NYMEX January Crude Oil is seen at $72.25/$71.35 level & resistance at $74.20/$75.25 levels.

Natural gas price will take cues from oil prices. Natural gas MCX December contract has major support at Rs. 228 & resistance at Rs.246 levels.

Courtesy: Angel Commodities

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