India crude oil to jump on inventory concerns

Last Updated : January 03, 2012 13:40

Oil rose after Iran said it had test-fired two long-range missiles, a display of military muscle flexing in the face of mounting Western pressure over its nuclear programme as international markets were closed crude on MCX traded in the tght range and closed up with +0.54% at 5325.

The move stoked fears of supply disruptions in the Strait of Hormuz, through which 40 percent of world oil is shipped, and pushed U.S. crude up 1.5 percent to around $100.35 a barrel.

Oil climbed in New York after manufacturing activity expanded in China and India and investors bet that further sanctions against Iran will curb supply. The PMI in India rose the most in 6 months in Dec, HSBC said yesterday, and a manufacturing index in China signaled expansion.

In Iran, Deputy Navy Commander told Press that any effort to harm the country?s interests will Lead to ?reciprocal measures.? The US and its allies are increasing pressure on Iran to halt what they say may be a covert nuclear weapons program. Sanctions signed into law by Obama on Dec. 31 aim to deter dealings with the Iranian central bank.

The EU which is considering a ban on oil from Iran, will be ready by Jan. 30 to decide whether to extend sanctions, Michael Mann, a spokesman for the EU, said yesterday.

Now technically market is trading in the range as RSI for 18days is currently indicating 60.72, where as 50DMA is at 5118 and crude is trading above the same and getting support at 5295 and below could see a test of 5265 level, And resistance is now likely to be seen at 5342, a move above could see prices testing 5359.

Trading Ideas:

Crude trading range is 5265-5359.
Crude oil gained on speculation that fuel demand will increase as manufacturing activity expands in China
Iran's recent threats to shut the Strait of Hormuz, added another geopolitical threat to markets
Tehran has threatened to close Strait of Hormuz, through which more than third of daily seaborne crude shipments pass

Courtesy: Kedia Commodities???

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MCX GASOLINE 25 January 2012 contract was trading at Rs 135.9 , up Rs. 5.25 . What's your view on it?

Source: http://www.commodityonline.com/futures-trading/commoditytrends/India-crude-oil-to-jump-on-inventory-concerns-10540.html

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