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WTI Crude oil chart is showing a flag formation at 96 levels, previous such flag was seen at 91-924 levels and subsequently moved higher. US crude oil looks bullish and the recent of Seaway pipeline has proved benefic..

22 Jan 2013

CHICAGO/MUMBAI (Commodity Online): Crude Oil prices have recovered from recent lows and climbing higher thanks to some positive trends seen in US and China economic data apart from quantitative easing programs announced by Japan’s Central Bank.

WTI Crude Oil for March settlement has climbed to $96.14 per barrel while ICE Brent Crude Oil has risen 0.25% to $112.05 per barrel on Tuesday resuming trade after Martin Luther King Jr day holiday on Monday. Crude for February delivery, which expires today, was at $95.65 a barrel in electronic trading on the New York Mercantile Exchange, up 9 cents at 11.32 Indian Standard Time. The average volume of all contracts was 4 percent above the 100- day average. The European benchmark crude was at a premium of $15.97 to New York futures for the same month. The spread was $15.16 on Jan. 17, the narrowest since July 24.

The recent fall in Brent Crude
Meanwhile, Ole S Hansen, Head of Commodity Strategy in an update Tradingfloor.com pointed out that hedge funds and other money managers cut their net-long exposure to Brent crude oil by 6,454 contracts to 143,582 during the week ending January 15, according to data from the ICE Europe Exchange. This reduction of bullish bets was the first in two months and occurred during a week where the price came under some pressure while the spread to WTI crude oil contracted to its narrowest in almost four months.

Both the gross long and short positions increased but gross short did so to a stronger degree. This could indicate some naked selling of Brent crude against WTI crude in anticipation of further spread contraction as the expanded Seaway pipeline from Cushing to the Mexican Gold became operable. Gas oil net-long position meanwhile rose for a third consecutive week, he added.

What do the WTI Charts indicate?
WTI Crude oil chart is showing a flag formation at 96 levels, previous such flag was seen at 91-924 levels and subsequently moved higher. US crude oil looks bullish and the recent of Seaway pipeline has proved beneficial for the contract. The next push can raise prices to $99 levels where it could meet resistance.

On intra day charts, uptrend is seen in Brent Crude Oil with a hammer formation that is suggestive of bullish reversal, Sreekumar Raghavan, Chief Commodity Strategist at Commodity Online said. At India’s Multi Commodity Exchange, Crude Oil February is trading flat at Rs 5157/barrel with strength in rupee impacting prices. Near term outlook is sideways, he added.


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