Weekly Outlook on Crude Oil - 29 December 2023

Weekly Outlook on Crude Oil - 29 December 2023
Weekly Outlook on Crude Oil - 29 December 2023

by Sachin Gupta Last Updated: Dec 29, 2023 - 06:02 pm 728 Views
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In 2023, crude oil faced a rollercoaster of challenges, marking its first annual decline in two years. Geopolitical tensions, production cuts, and global efforts against inflation caused wild price swings. Despite a recent stabilization, oil prices are set to end the year about 10% lower, reaching levels not seen since the pandemic-hit 2020.

Weekly Outlook on Natural Gas

The disruption of the Red Sea route due to Yemen's Houthi militant group added to the uncertainties, leading to a 3% drop in oil prices. Major firms adjusted their shipping routes in response. OPEC+ production cuts aimed at stabilizing prices proved insufficient, with benchmarks declining nearly 20% from their peak in 2023.

The U.S. Energy Information Administration reported a much larger-than-expected draw in U.S. crude oil inventories last week. Oil stockpiles fell by 7.1 million barrels, while analysts polled by Reuters had expected a draw of 2.7 million barrels.

MCX Crude oil prices recently dropped over 2% and are hovering near the psychological level of 6000. They've been trading below the 61.8% Retracement Levels with a negative RSI crossover. However, the prices are still above the 200-week SMA and trendline support on the weekly scale. Significant support lies at 5820/5650, while resistance levels are at 6350 and 6500.

Currently, the price appears to be moving sideways, and a breakout in either direction is awaited. Traders are advised to monitor developments in the Red Sea and inventory data for better insights into future price actions.

Important Key Levels:

 

MCX CRUDE OIL (Rs.)

WTI CRUDE OIL  ($)

Support 1

5820

66.90

Support 2

5650

63.00

Resistance 1

6350

79.00

Resistance 2

6500

84.90

 

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About the Author

Mr. Sachin Gupta is a Senior Research Analyst at 5paisa, based in Mumbai. He has over 10 years of experience in Equity, Commodity research and strategies. 

Disclaimer

Investment/Trading in securities Market is subject to market risk, past performance is not a guarantee of future performance. The risk of loss in trading and investment in Securities markets including Equites and Derivatives can be substantial.
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