Crude oil advanced and managed to closed with a gain of 1.29% as investors bet that signs of economic recovery and shrinking U.S. stockpiles indicate fuel demand will increase in the world’s biggest crude-consuming nation. US reports on durable-goods orders and home prices beat economists estimates. Energy Dept data showed supplies declined 2.21mbls to 351.8mln last week. Hopes were lifted earlier in the week for a resumption of Libyan oil production after rebel forces stormed the capitol Tripoli, paving the way for the ouster of long-time leader Gadhafi. European refiners, in particular, have been hard-hit by the absence of Libyan oil since the onset of hostilities in Feb, and have sought replacement supplies from African producers. In Nigeria, Royal Dutch Shell declared “force majeure,” a legal term meaning the company would be unable to make scheduled deliveries, after an apparent sabotage attempt on one of the company’s pipelines. The announcement was expected to reduce the company’s Nigerian exports by some 200k bpd. Now technically market is trading in the range as RSI for 18days is currently indicating 46.3, where as 50DMA is at 4192.72 and crude is trading below the same and getting support at 3909 and below could see a test of 3855 level, And resistance is now likely to be seen at 4005, a move above could see prices testing 4047.

Trading Ideas:

Crude trading range is 3855-4047.

Crude oil futures moved higher as US government figures showed a surprising drop in crude stockpiles last week.

Hurricane Irene, a Category 3 major storm, is “pounding” the Bahamas after gaining strength.

Hopes were lifted for a resumption of Libyan oil production after rebel forces stormed the capitol Tripoli.