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The positive outlook in prices may continue as the ongoing supply gap - Geojit Financial
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Crude oil prices extended gains, ICE Brent surged to near 3 -year high by claiming above USD80 per barrel and retreated last week awaiting of OPEC meet. Widening supply demand gap continue to weigh the market sentiments.
Global Economy
• Major equity indices across globe dwindled on worries of higher inflation, slowing economic growth and rising interest rates. US Dow Jones industrial average index slipped by 1.36 percent, while Chinese mainland benchmark equity index declined 1.24 percent before the golden week holidays.
• China’s Industrial profits slowed further in August to 10.1 percent from a year earlier as high commodity prices scaled up costs.
• U.S. Consumer confidence dropped to seven month low in September
• US Manufacturing expanded further in September, while Chinese Manufacturing contracted in September for the first time since Covid19 Pandemic.
Energy
WTI crude in NYMEX gained 2.57 percent last week, while ICE Brent gained 1.52 percent.
Russia oil and gas condensate output rose to 10.72 million barrels per day in September, the highest level since the 11.34 million bpd pumped in April 2020
Technical Outlook
The positive outlook in prices may continue as the ongoing supply gap likely to be widened as some of the OPEC members is still unable to raise output to the agreed levels. This may worsen the demand-supply dynamics when demand starts to really recover and exceed pre-pandemic levels. However, output from the U.S, the world’s largest oil producer if picks up steam again that likely to limit major gains in prices.
NYMEX Oct: Though the bullish outlook remains on the cards, a direct break above $77 is required to extend the momentum. Immediate trend reversal point is placed at $69.
MCX Oct: Inability to break the immediate resistance of Rs 5700 expect choppy trading initially. A direct break above the same would attract further bulls in the counter.
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