Commodity Radar: Crude oil in bearish trend. Expert suggests sell on rise for this target

Crude oil futures were trading in a tight range on Wednesday amid demand concerns. The MCX August crude oil futures were trading flat around Rs 5,647 per Bbl taking cues from the international prices which were trading flat on the COMEX.

The WTI crude oil futures were trading at $65.22, down by $0.09 or 0.14% while the Brent futures were hovering near the $68.52 mark, down by $0.07 or 0.10%.

Commenting on the current trends, Naveen Mathur, Director – Commodities & Currencies, Anand Rathi Shares and Stock Brokers, said crude oil prices are under pressure, and have extended losses for a third straight session amid escalating U.S.-EU trade tensions and a looming tariff deadline on August 1.

WTI oil is trading near $66, with downside risks intensifying as expectations build for a better-supplied market in the coming months.

“Although the EU’s latest sanctions targeting Russian oil products could disrupt diesel exports from India, the overall market reaction has been muted due to continued Russian flows via intermediaries,” Mathur said.

However, weak housing data and high mortgage rates point to slowing growth, but easing inflation and improving consumer sentiment could prompt the Fed to cut rates, supportive for energy demand, Mathur opined. Amid all the bearish triggers looming, Crude oil has still maintained its $65-69 price band. US Oil rigs are falling consistently while geopolitical tensions remain. Moreover, China’s push to stockpile crude will help offset the softer tone.

Mathur sees some temporary spikes, but the long-term outlook remains bearish oil in his view.

Technical Outlook

MCX Crude Oil August contract is trading below its 21-Daily Moving Average at Rs 5,725, indicating continued bearish momentum, the Anand rathi analyst said, adding that technical indicators like MACD and RSI are showing a negative bias and the price is likely to remain in a broader range of Rs 5,500–Rs 5,800.

A strong support is seen at Rs 5,530, and a break below this level could trigger further downside towards Rs 5,391 and Rs 5,285, he said further.

Crude oil futures trading view:

In the short term, the strategy remains to sell on a rise near Rs 5,700 with a stop loss at Rs 5,800 and target of Rs 5,500.

WTI Crude Oil continues to trade in a bearish trend, struggling to hold above the key $65 level. A break below $64.50 could accelerate the downside move towards $62.80 and $61.70 levels. On the upside, resistance is seen at $66.30 followed by $67.90. Overall sentiment remains weak unless prices manage to sustain above immediate resistance zones.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)