The 20 March crude oil futures were trading at Rs 5,627 per BBL, up by Rs 63 or 1.13% from the Wednesday closing price. The closing price on 9 March was Rs 6,277.
On a year-to-date (YTD) basis, the MCX crude oil prices have dropped by 14.09% while falling 12.25% on a month-to-date basis, commodity and currency expert Anuj Gupta said. As for Brent crude, the YTD fall has been to the tune of 14% while on the MTD basis, the decline is at 11.17%.
Notwithstanding the assurance by OPEC on China’s crude oil demand outlook improving in 2023, the outlook for black gold remains bleak in the near term. Global economic crisis and the more recent banking crises in the developed world have become a cause of concern, experts opine.
“With the adverse perception of the banking crisis and the rising crude stockpiles, crude prices are anticipated to be under pressure,” Prathamesh Mallya, Assistant Vice President (AVP) – Research, Non-Agri Commodities, and Currencies at Angel One said.
Thoughts of a resurgence in Chinese oil consumption were dampened by the concern over Credit Suisse, which overshadowed the positive development, Mallya added.
Citing American Petroleum Institute data via market sources, the expert pointed out another negative in the form of oil stockpiles increasing by around 1.2 million barrels over the course of the week.”On Wednesday, crude prices witnessed a drawdown as both the benchmark indices, Brent and NYMEX ended with deeps cuts of nearly 9% and 6%, respectively. This prolonged weakness saw crude prices slip towards one-year lows,” he further said.
Crude prices began on a favourable note as economic activity in China picked up in the first two months of 2023 after the end of strict COVID-19 containment measures, Mallya said.
“Brent oil fell below $75 to $74.24 per barrel on recession/falling demand concerns,” Anil Kumar Bhansali, Head of Treasury Finrex Treasury Advisors LLP said.
Movement of rupee against the dollar will be a strong indicator on how major commodities like oil, base metals or gold perform in the near term.
Rupee could see 82.90 which will be a protective zone by the Reserve Bank of India (RBI) at least in March 2023, Bhansali added. The Indian rupee fell on Wednesday and closed at 82.60 against the greenback on reports of the failure of Swiss Banking Major Credit Suisse as European stocks fell across the board by 3.5%.
Anuj Gupta’s Trading Strategy
— Sell crude oil around $75 with a stop loss at $81 and price target of $75
— Sell MCX Crude oil at Rs 6,000-6,200 with a stop loss at Rs 6,750 and price target of Rs 5,200-5,000
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
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