India crude oil to trade higher on global demand concerns

Last Updated : January 04, 2012 13:55

Crude oil added to sharp gains in the line of expectation and jumped by almost +2.15% to settled at 5442 rallying to a 7-week high after data showed that mfg activity in the US expanded at the fastest pace since June last month, while simmering tensions between the US and Iran provided further support.

The US ISM said earlier that its PMI rose to 53.9 vs 52.7 in Dec, beating expectations for a reading of 53.2. The report came after official data showed that Chinese mfg activity returned to expansionary territory in Dec after contracting in Nov.

Meanwhile, reports that Iran had produced its first nuclear fuel rod added to ongoing concerns over a potential disruption to Iranian oil supplies.

The report came after the Islamic Republic said it had test-fired 2 long-range missiles over the weekend as part of an ongoing naval drill in the Strait of Hormuz. Iran has threatened to close the strait as possible retaliation to new sanctions over Iran's nuclear program.

Obama signed a law on Saturday imposing tougher financial sanctions that could for the first time hurt Tehran's oil exports, while the EU is due to consider similar steps soon.

Now technically market is trading in the range as RSI for 18days is currently indicating 65.13, where as 50DMA is at 5134 and crude is trading above the same and getting support at 5361 and below could see a test of 5281 level, And resistance is now likely to be seen at 5493, a move above could see prices testing 5545.

Trading Ideas:

Crude trading range is 5281-5545.
Crude oil soared after reports that Iran produced its first nuclear fuel rod and a plunging dollar triggered the buying.
ISM's US factory index advanced, as well as Chinese and Indian metrics, providing bullish signals for economic growth.
Iran has threatened to close the strait as possible retaliation to new U.S. economic sanctions over Iran's nuclear program.

Courtesy: Kedia Commodities

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MCX Copper 29 February 2012 contract was trading at Rs 393.4 , up Rs. 1.8 . What's your view on it?

Source: http://www.commodityonline.com/futures-trading/commoditytrends/India-crude-oil-to-trade-higher-on-global-demand-concerns-10564.html

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