By Bhavik Patel
Crude price has been trading in the range of 5700-6100 for the past one week. Both bulls and bears are on even footing as OPEC+ production cut will tighten oil market in second half of the year while US debt ceiling and fall in demand anticipation is keeping prices under check. US inventory is also falling giving a boost to prices but the overhang of debt ceiling and Chinese weak factory data is keeping prices from rallying further on the upside.
With the implementation of the additional 1.16 million bpd OPEC+ production cuts, output figures are expected to be lower in May/June 2023, but exports may not necessarily follow suit. This week some sentiment improved for crude when the US decided to replenish their reserves for strategic petroleum.
In MCX, crude oil prices are taking resistance around its 20 and 50-day moving average. On a daily scale, the trend still is neutral to bearish courtesy of lower top formation. However crude has made higher bottom formation indicating some sort of bottom formation. Crude has immediate resistance at 6060 and 6250 while support at 5800 and 5700. Range trading can be initiated where one can go long around the support zone of 5800 with stoploss of 5700 and expected target of 6100 and short position around 6150 with stoploss of 6250 and expected target of 5900. Until a clear direction is not emerging, we would advise to trade in the following range mentioned above.
(Bhavik Patelis a commodity and currency analyst at Tradebull Securities. Views expressed are the author’s own. Please consult yourfinancialadvisor before investing.)