Crude Oil May Retain Momentum Even On Higher Stockpiles

US Crude Oil stockpiles increased 2.4 million barrels last week, the American Petroleum Institute said. An Energy Department report today may show inventories rose 2 million barrels, according to a Bloomberg News survey of analysts. Gasoline and distillate supplies also climbed, the API said. Supply and demand in the market are pretty much balanced, with a slight deficit, but that is a normal seasonal pattern.

WTI Crude Oil Futures for February delivery shot to $93.80 a barrel on the New York Mercantile Exchange. The Crude Oil contract settled at $93.15 on Jan. 8, the highest since Sept. 18. Prices dropped 7.1% last year for the first decline in four years. US gasoline stockpiles rose 7.9 million barrels in the week ended January 3, the API report showed. Supplies are projected to climb 2.5 million barrels in the Energy Department report, according to the median estimate of 11 analysts surveyed by Bloomberg. Distillate inventories, including heating oil and diesel, increased 5.9 million barrels, compared with a forecast 1.9 million-barrel gain in the survey.

Crude Oil Price And Trend Forecast:
Crude Oil has surpassed a strong resistance of $90 with reasonable strength & can be expected to retain momentum till above this level. Occasional dips on higher Crude Oil inventory reports could push Crude Oil close to $90 and the same should be used for buying for the medium-term. I have a strong feeling that Crude Oil may rise well above $$98.20 to $100 in the medium-term. Sell orders tend to be clustered only near resistance levels. Overall, the markets remain firm.

We do see wobbles during the course of the day but it is quite clear that we have a short- to medium-term uptrend in place and that’s consistent with the global industrial growth expectations. Crude Oil inventory numbers tonight with a forecast increase that keeps stockpiles at very elevated levels may trigger big volatile movements. The Energy Department raised its oil price projections for 2013 and forecast that global consumption will expand to a record.

WTI Crude Oil will average $89.54 a barrel, up 1.3 percent from the December estimate of $88.38, it said yesterday in its monthly Short-Term Energy Outlook. The US Crude Oil benchmark averaged $94.12 in 2012, less than the December estimate of $94.26. MCX Crude Oil in India was up at Rs. 5169 yesterday. There can be some weakness in Crude Oil Prices on a decline below Rs. 5080.

Precious And Base Metals Trade:
Copper declined slightly though inventories at London Metal Exchange warehouses climbed to the highest level in 11 months, prompting minor concerns over the demand. MCX Copper shows resilience around Rs. 446. Nickel and Lead have remained firm while Zinc and Alluminium show signs of recovering from some corrections that were due after the handsome rally seen in Base Metals after the US Fiscal Cliff deal was announced and China, the biggest consumer of Base Metals, showed robust Economic reports and signs of a stronger than expected growth in 2013.

Comex Gold Prices gained after yesterday’s declines amid dull trade, but MCX Gold Prices fluctuated on the INR – Indian rupee rise against the US dollar. MCX Gold declined to Rs. 30,896, but showed no further weakness. Comex Silver also gained whereas MCX Silver showed slight weakness again on the back of the INR rise.