Tuesday, November 18, 2008

Commodity Should Edge Up From Hereon With A Target - Nov 18, 2008

Crude oil futures neared $56 a barrel today, after falling initially in the early Asian trades. The commodity was getting influenced by bargain hunting and signs that the sharp pullback in the commodity off late might have been overdone. Yesterday, the U.S. Navy confirmed that a Saudi oil tanker was taken by Somali pirates off the coast of Kenya. Pirates also took a Japanese chemical tanker off the coast of Yemen.

OPEC's Monthly Oil Report said yesterday that they expect world oil demand to average 86.2 million barrels per day (mbd) in 2008 and 86.7 mbd in 2009. That is a little more than the U.S. Energy Department's estimate of 85.9 mbd in 2009.

In the commodity market, crude oil settled down $2.09 at $54.95 on Monday, the lowest settlement since late January 2007 as worries about the economic outlook in the United States and Japan stoked concerns about global fuel demand.

The commodity trades at $55.74 a barrel right now, gaining 79 cents from the previous close as the rebounded extended. The commodity had dipped to $55.93 earlier in the day and $56.10 and $56.70 should prove to be tough barriers on the upside.

MCX Oil trades at Rs 2840, down Rs 38 a barrel or 1.32% from the previous closing price. The commodity should edge up from hereon with a target of Rs 2865 –equivalent to its days highs. A break above would bring in Rs 2889 in picture.

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