Commodity Trading Tips for Crudeoil by Kedia Commodity

Ajay Kumar Kedia 3 July 2013

Crudeoil yesterday settled up 1.73% at 5929 tracking NYMEX Crude oil futures which settled above $100 for the first time since last year as civil unrest in Egypt was on traders' minds. Traders bid crude higher after Egyptian President Mohamed Morsi rebuffed the military's ultimatum to comprise with protesters or relinquish power. In a long speech, Morsi blamed "remnants of the former regime" for the situation in Egypt today while reiterating he has a constitutional mandate to remain in power. Morsi's supporters believe the military's ultimatum is a prelude to a possible coup, which traders believe could threaten oil supplies from the Middle East that must move through the Suez Canal. Morsi was supposedly elected democratically, but he has failed to gain the support of most ordinary Egyptians as unemployment in North Africa's largest economy has spiked with joblessness among the nation's young people well above 20%. Elsewhere, the API said US oil inventories fell by 9mbls last week, well above the decline of 3mbls market expected. Gasoline inventories fell by 200kbls, while distillate stockpiles dropped by 2.3mbls. Market expected an increase of 1mbls in gasoline inventories and a rise of 1.3mbls in distillate supplies. Also Goldman Sachs closed its trading recommendation to buy US crude oil and sell Brent oil on Tuesday, as the closely watched spread between the European and US benchmarks reached its narrowest since early 2011. Technically market is getting support at 5844 and below same could see a test of 5759 level, And resistance is now likely to be seen at 5986, a move above could see prices testing 6043.