Last Updated : 09 October 2012 at 10:30 IST
Crude Oil makes a come back across Comexes on technicals, supply fears
Source :Bloomberg News
The strength in rupee is helping crude oil futures on the MCX to maintain a firm trend. At 52.24 against the U.S. dollar in early trade, rupee has gained 40 paise.
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NEW YORK(Commodity Online): With tensions escalating between Syria and Turkey and oversold positions in crude oil creating a psychological buy back, crude oil climbed across board in comexes snapping the losing trend in prices.
November crude oil on the NYMEX jumped up to $1 and reached $90.33 a barrel in electronic trading and was seen trading at $90.17 at 12:10 p.m. Singapore time. It had previously lost 55 cents and was at $89.33 on Oct. 8, the lowest point close since Oct. 3. For 2012, the prices have been down 8.8%.
The ICE Futures counterpart of WTI, Brent crude gained $85 cents and touched $112.67 a barrel; its prices are up 4.9% this year, signalling supply side concerns and increasing demand from developing nations. No wonder, the premium between WTI and Brent stands at $22.50
“WTI was the most oversold, so technically speaking, it would bounce more than Brent,” said Gordon Kwan, head of energy research at Mirae Asset Securities Ltd. in Hong Kong to Bloomberg. “It’s more like a dead-cat bounce until we seriously get into the winter heating oil season, which doesn’t begin until Dec. 1.”
Meanwhile border tensions have escalated between Syria and Turkey and further escalations in conflicts have the potential to send shockwaves across the Middle East thereby creating uncertainty in supply side systems.
Also, the strength in rupee is helping crude oil futures on the MCX to maintain a firm trend. At 52.24 against the U.S. dollar in early trade, rupee has gained 40 paise. Since crude oil is a dollar denominated commodity, depreciation in dollar makes it financiially easier for traders to make purchases.
On the MCX, crude oil for October delivery was seen trading at Rs.4734, a marginal gain of 0.72%.
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