Crude futures settled with a gain of 41rs to settled at 5504 supported by a rally in equities after the Fed Reserve said it was prepared to do more to aid the economy if necessary. The FOMC stated that it expects economic growth to remain moderate over the coming quarters and then to pick up gradually, increasing demand hopes for the commodity. In addition, the Fed boosted its outlook for growth and is slightly more optimistic on employment adding to the bullish sentiment. Crude inventories rose 3.98mbls to 373m last week, hitting a 11 month higher and weighing on prices. The report was expected to show that US crude oil stockpiles rose by 2.8mbls last week to the highest level since May, underscoring fears over a slowdown in oil demand from the US. Goldman Sachs said that oil prices will rise as demand is expanding faster than production capacity even as the global economy slows. However gains were limited after an auction of Spanish short term government debt saw the country’s borrowing costs almost double, while Italy’s borrowing costs rose to the highest level since January after an auction of government bills. Now technically market is trading in the range as RSI for 18days is currently indicating 58.62, where as 50DMA is at 5416 and crude is trading above the same and getting support at 5462 and below could see a test of 5420 level, And resistance is now likely to be seen at 5529, a move above could see prices testing 5554.

Trading Ideas:

Crude trading range for the day is 5420-5554.

Crude oil rose getting a lift from U.S. equities despite pressure from a larger-than-expected increase in U.S. crude inventories.

The world's top oil exporter, Saudi Arabia, has increased its crude inventories to meet higher power demand this summer

Crude inventories rose 3.98mbls to 373m last week, hitting a 11 month higher and weighing on prices.