Crude Oil prices look all set to reclaim new highs after EIA confirmed that US commercial storage dropped for the third consecutive week.
EIA reports showed that Crude Oil stocks dropped 7.2 mln along with both gasoline and distillates which were down 1.01 mln and 1.85 mln respectively. The drop in storage is much more than what market participants anticipated at 2.6 mln and below API’s forecast of a decline of 10.23 m, nonetheless, it confirms the fact that US production is indeed slowing down along with built-up storage over the first half of the year. The overall report is very bullish for prices.
Crude Oil is trading at Rs.3145/bbl currently after the inventories report. Intraday resistance for Crude Oil is Rs.3140/bbl and sustained activity above this level should bring in bullish momentum today for price objectives at Rs.3180-Rs.3200. Over the short term, we see Crude rally to Rs.3250-Rs.3300 in the next trading sessions. On the flip side, declines are likely to limited to supports at Rs.3090-Rs.3100 and only a strong breakdown with volumes would negate the current trend and call for a short term reversal in prices.
Source: Commodity OnlinePrevious Next