MC: See range for crude at $33-48/bbl for few weeks
Ashok Mittal of Karvy Comtrade expects crude oil to remain in the range between USD 33 per barrel to USD 48 per barrel for a couple of more weeks, with a bias that the downside. He sees USD 33 per barrel to act as a strong support level for crude.
Here is a verbatim transcript of the exclusive interview with Ashok Mittal on CNBC-TV18. Also watch the accompanying video.
Q: We have seen a broad range of 18% in crude prices this week between USD 41 per barrel on the higher side to USD 35.50 per barrel on the lower side in the New York Markets yesterday, what is your sense on where do you see commodities ranging now from here on?
A: Crude oil will remain in a range for a couple of more weeks, a broad range which I am expecting should be between USD 33 per barrel to USD 48 per barrel with a bias that the downside should be comparatively limited and we should be able to see the earlier highs which it made recently then maybe to break them.
I expect USD 33 per barrel to remain as a strong support level and maybe a little later we should see the prices moving up and two reasons behind that; one is that we expect there to be further cuts on the production side because the market expects one million barrels to be in excess. I have also seen in the last couple of days rupee also seems to be going up which means on the weaker side, so if the dollar rupee weakens further Rs 49 and above then again we can expect in terms of rupee the crude oil prices to be higher.
One important point which we are observing in the last couple of weeks is that the rollover cost between two months has been quite high about Rs 200-300 which is about USD 7-8 which we are seeing and this is there currently also and unless this rollover cost actually comes down which should come down to maybe USD 1-2 and then there will be some kind of a confirmation that you can see fuel prices moving on the higher side.
Currently if you look at February contract which is about 2150 or so, I think 2120 should be a good support level for short term 2080 and we will expect about 2180 or 2200 levels in the coming days.
Q: We have seen sharp declines into gold as well; USD 807 per ounce has been the low yesterday, we have seen some buying from those levels but would you say that the commodity is vulnerable to some more losses from here on?
A: While on the long term gold still looks good and we expect it to go up but however on short term that upside is comparatively not visible and I expect some kind of further correction to happen on gold, and in terms of dollars I will expect some where between USD 790 per ounce to 800 per ounce which means a USD 10-15 downside possible from the current levels which effectively means we may see close to Rs 12,650 kind of levels, so if you see current levels or if we get a little up tick of USD 815 per ounce to USD 816 per ounce which means on February MCX contract if we see Rs 12,880 levels then we should sell and keep the stop loss of RS 12,960 and the target which I am expecting should be somewhere between 12650 to 12680.
