Tuesday, March 25, 2008

Oil Dives, $99.50 May Act As Good Support

Crude prices fell today on continued concerns of an impending recession in the U.S., the world’s largest economy. It dipped briefly below the $100 mark as a relatively stronger dollar, weaker demand and growing crude oil inventories made it extended its last retreat.

Yesterday OECD revised downward its economic forecasts for first and second quarters of the year for US. OECD said that the US economic growth for the first quarter from 0.3% to 0.1% and from 0.4% to zero for the second quarter.

U.S. light crude for May delivery recouped some early losses to stand 50 cents lower at $100.35 a barrel, sharply down from a record high $111.80 a barrel touched on March 17. Break of $99.50 may result in further downward movement in the counter.

MCX oil for the benchmark April futures contract is trading down Rs 63 at Rs 4018 per barrel. The traders may enter short on price spurts towards 4050 levels with the supports at 3999 and 3945 levels.

U.S. crude oil stocks likely rose for a third week, climbing 700,000 barrels in the week to March 21, while distillate and gasoline stocks probably fell, according to survey done by analysts ahead of Wednesday's government data

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