Commodity Trading Tips for Crudeoil by Kedia Commodity

Ajay Kumar Kedia 7 August 2013

Crude Oil Crudeoil yesterday settled down -1.28% at 6459 as investors sold to prepare for an eventual end to Federal Reserve stimulus measures, betting that despite uncertainty as to when such policies may taper, the decision will come this year. Federal Reserve stimulus programs such as monthly bond purchases push down interest rates to drive recovery, weakening the greenback in the process and making oil an attractive buy in dollar-denominated commodities exchanges. Talk of an end to stimulus tends to have the reverse effect. Federal Reserve Bank of Dallas President Richard Fisher said Monday that monetary stimulus programs won't last forever. "A corollary of reining in this massive monetary stimulus in a timely manner is that financial markets may have become too accustomed to what some have depicted as a Fed 'put.' Some have come to expect the Fed to keep the markets levitating indefinitely," Fisher said earlier, according to prepared remarks of his speech. "This distorts the pricing of financial assets, encourages lazy analysis and can set the groundwork for serious misallocation of capital." Spotty indicators have many investors guessing the Federal Reserve may begin to wind down stimulus programs in December as opposed to previous calls in September, though energy investors sold oil on sentiments that either way, monetary support for oil is on its way out. Supply issues pushed down prices as well. Libyan authorities said production was on the mend, while North Sea exports are getting back to normal after supply glitches as well. Technically market is getting support at 6399 and below same could see a test of 6338 level, And resistance is now likely to be seen at 6572, a move above could see prices testing 6684.