AHMEDABAD (Commodity Online) : Crude succeeded in rising for the first time in six days after the disappointing 7.9 % drop witnessed last week, as investors regained confidence to purchase the commodity once again after the extensive decline.
However, the optimistic wave still remains small due to woes regarding the weak recovery in the US economy, as the largest energy consumer today is celebrating Independence Day, which reduced volume in the market.
At MCX, Crude for July contract rose by Rs 53, or 1.45 per cent, to Rs 3375 per BBL, and is currently trading at 3437, with an open interest of 37,505 lots. Technical indicators is showing firm buying signal in crude oil after today’s recovery in price. On hourly basis 14 days Relative strength index (RSI) shows a value of 60 and price is also above 13, 21, and 34 days short term moving averages, according to Amrita Mashar, Analyst with Commodity Online
Last week US and China reported slowing expansion in their manufacturing activity, although China stated that it maintains expectations of a relatively fast and steady pace of growth. The drop in crude oil last Friday to 71.65 per barrel followed Labor Department's reported decline in payrolls last month by 125.000 jobs due to government increased number of layoffs.
Amrita added that fresh buying by speculators in succession with a firming global trend mainly led to a rise in Crude Futures prices. Crude oil price may test 3510 before commencement of US crude inventory data. Short term traders will get chance to profit booking at this level. Else overall trend seems to be down due to slowing economy growth.
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