NEW YORK/NEW DELHI (Commodity Online): Traders continue to build up long positions in the hope that geo-political tensions and a possible war with Iraq could squeeze supplies although fundamental factors do not support a rally in prices.
US crude stockpiles have climbed 2.9 mn barrels last week and uncertainty over Eurozone debt crisis continues to impact demand growth for the commodity.
WTI Front month contract at Nymex closed higher on Tuesday extending the month’s rally. It rallied to $101.81 before climbing lower to settle at 100.74. HY Markets in a market review said that support for crude oil is now seen at 100.07, 99.40 and 98.03 while resistance levels are at 101.61, 102.48, 103.15
Charts show crude oil is set for a higher opening on Wednesday, “stochastics and the RSI remain bullish signalling that sideways to higher prices are possible nearterm. Closes above the reaction high crossing are needed to confirm that a shortterm low has been posted. If it renews the decline off January's high, December's low crossing is the next downside target,“ HY Markets said.
Brent oil March contract, which expired yesterday, climbed 23 cents to $118.16 a barrel on the ICE Futures Europe exchange yesterday. The more-actively traded April contract fell 4 cents to $117.35. The European benchmark contract’s premium to New York-traded West Texas closed at $17.42, the highest recorded was $27.88 on October 14, 2011.
In US futures markets, speculators continue to build up long positions in crude oil in January, according to CFTC data released on February 8th. “NYMEX WTI Crude Oil futures open interest increased 5.6 percent in January. Commercial participants, who accounted for 48.0 percent of open interest, held net short positions; they decreased their long positions by 1.8 percent and increased their short positions by 3.7 percent. Non-commercial participants, who accounted for 46.9 percent of open interest, held net long positions. They increased their long positions by 11.6 percent and increased their short positions by 9.8 percent. Non-reportable participants, who accounted for 5.0 percent of total open interest, held net long positions; they increased their long positions by 9.3 percent and decreased their short positions by 7.8 percent."
At India's Multi-Commodity Exchange (MCX), crude oil futures for February delivery has risen 1.23% this week to Rs 4926 per barrel at close on Tuesday after rising above 5000 in morning trade as depreciating rupee has raised the import prices of crude oil. The Petroleum Ministry said on Tuesday that import prices had reported on Tuesday that import prices had risen to Rs 5974 per barrel due to depreciating rupee. India depends on North Sea brent crude oil to meet its energy requirements.
