Last week saw a further moderation in crude prices. Brent crude oil futures on the Intercontinental Exchange (ICE) dropped by 2.2 per cent to $72.80 per barrel. Similarly, crude oil futures on the MCX fell by 0.5 per cent to ₹6,118 per barrel.
Brent Futures ($72.80) Brent crude oil futures continued their decline from the previous week, hitting an intra-week low of $71.92 on Wednesday before showing a slight recovery in the following sessions. As long as the contract remains below the resistance level at $75, the bias is expected to be bearish. The price may potentially drop to $70.70, with further support at $69. On the upside, a breakout above $75 could lead to resistance at $77, signaling a more positive outlook.
MCX-Crude oil (₹6,118) March crude oil futures on the MCX reached an intra-week low of ₹5,976 on Wednesday before bouncing back in subsequent sessions to close above the support level at ₹6,000. Despite this minor uptick, the contract still maintains a bearish bias. While a short-term rise to ₹6,200 is possible, further declines towards support levels at ₹5,770 and ₹5,650 are expected before any sustained rally. A break below ₹5,650 could intensify selling pressure, although this scenario is less likely. In the event of a rally without touching the lower price levels, resistance at ₹6,400 could pose a challenge. However, the overall bias remains bearish.
Trade Strategy: Consider shorting crude oil futures at ₹6,200 with a stop-loss at ₹6,420 and profits expected at ₹5,770. If the price declines to ₹5,850 post going short, trail the stop-loss to ₹6,100.
Published on March 1, 2025.
