Crude Oil trimmed losses and settled at 5048 that is down by Rs.35.00 after testing a low of 5003 earlier in the day but recovered following a US government report on oil supplies. EIA said in its weekly report that US crude oil inventories rose by 2.1mbls in the week ended May 11, above expectations for a 1.7mbl increase. Despite the higher than expected build, markets blew a sigh of relief as the government report came a day after the API said that US crude inventories soared by 6.6mbls last week. Oil prices were sharply lower before the supply data as investors cut their exposure to growth linked assets amid mounting fears over the possibility of a Greek exit from the euro zone. Oil futures have been on a rapid decline since the outcome of the May 6 elections in Greece, which threw the future of bailout deal into doubt and fuelled fears over a possible Greek exit from the euro zone. There are worries that the region’s sovereign debt crisis could trigger a broader economic slowdown that would curb demand for oil. Rising Saudi Arabian and Libyan output and signs of slower US economic and employment growth, helped pull oil prices back from Q1 highs. Now technically market is in oversold as RSI for 18days is currently indicating 28.62, where as 50DMA is at 5365 and crude is trading below the same and getting support at 4994 and below could see a test of 4940 level, And resistance is now likely to be seen at 5111, a move above could see prices testing 5174.

Trading Ideas:

Crude trading range for the day is 4940-5174.

Crude oil prices fell a fourth-consecutive day as U.S. crude inventories stood at a 22-year high.

OPEC officials have said they want to drive price of oil to $100 as there are worries over potential demand destruction.

EIA report showed U.S. crude oil inventories jumped by 2.10 million barrels