MAJOR HIGHLIGHTSCrude Oil prices ended the week 9.98% lower than previous week.
The US Labor Department reported on Friday, that the unemployment rate jumped to a 14-year high of 6.5% in October.
October Nonfarm payrolls declined of 240k against the expectation of a 200k decline.
China announced a huge stimulus package on Sunday worth $586 billon.
MARKET RECAPCrude Oil prices ended marginally higher on Friday amidst range bound trading, as weakness in dollar against Euro and pre weekend short covering supported oil prices. Crude oil for December delivery gained by 0.44%, to close at $61.04 a barrel on NYMEX.
Despite Friday’s marginal gain, oil prices fell by almost 10% in the last week, as weak US unemployment data has reinforced concern that the country has entered into a recession, which will limit the consumption of oil products. US fuel demand for last four weeks averaged 19.1 million barrels, down by 6.7% from a year ago.
New York Mercantile Exchange December Natural Gas futures traded lower, as sluggish demand is weighing on gas prices. December natural gas ended at $6.757, down by 3.18%.
OUTLOOK
Crude Oil prices are trading range bound for last for last couple of weeks. We believe that stimulus package offered by China, the world’s second largest oil consumer, will stimulate investment and consumer spending, which drives oil demand. With Saudi Arabia deciding to cut oil supply to Asian countries, oil prices can have limited downside in the short term. Today oil prices are expected to trade sideways up, with key support is seen at $60 a barrel.
Although downside in oil prices looks limited in the short term, factors like stronger dollar, weakening US and European economy can limit the upside in oil prices. Prices are likely to face strong resistance near $75 a barrel in the medium term.
For MCX November contract, immediate and crucial supports are seen at Rs. 2970/2910 and resistance is seen at Rs.3080/3155. On Intraday basis, prices are expected to trade sideways up.
Natural Gas prices will take cues from crude oil prices and can trade sideways. In near term, NYMEX December futures can trade in the range of $6.70 and $7.25.
Courtesy: Angel Commodities
