Crude settled up $6.11 at $51.55 on Friday, as early gains on U. S. stocks helped offset government data showing a arger-thanexpected 3.9 million-barrel build in U. S. crude stocks to a 19-year high last week.

Natural gas futures ended lower on Friday as mild weekend forecasts, growing supplies and a weak economy continued to weigh on sentiment.

The International Energy Agency (IEA), said that it can’t rule out the possibility of an oil supply shortage in 2013-14 because of slower investments in oil exploration and production by OPEC and other oil producing countries.

OPEC members have deferred investments in a total of 35 drilling projects. OPEC, supplier of about 40% of the world’s crude faces a 51% drop in revenues this year because of drop in crude prices. Thirteen Asian countries along with OPEC are in the process of drafting a plan to curb the speculative trading by investors in crude oil.

Gulf oil producers said on Sunday that they can tolerate moderate crude prices for longer to help revive global growth, but shared a concern with consumer nations that a prolonged period of low prices could sow the seeds of a future fuel price spike. According to OPEC Secretary General Abdullah al-Badri, " World oil prices could recover to $60 per barrel by the end of the year if demand in the global economy picks up"

Crude oil prices may edge down as news of swine flu is adding negative sentiments amongst traders. We may see prices testing $48 on NYMEX but our recommendation is to buy at dips during the day. On MCX Rs. 2450-2470 are good levels to enter in long position. Natural Gas continues to remain laggard and may edge down during the day.

Crude oil technically does not look very strong as ADX is still below 25 and -DI is higher than+DI so upside is likely to get capped in crude oil futures. We see good resistance at 2675 levels and on the downside we might see crude oil futures testing Rs. 2415.