Crude Oil Outlook - March 7, 2022 - Reliance Securities

Mr. Sriram Iyer, Senior Research Analyst at Reliance Securities

International oil prices surged higher on Friday as Russia's invasion of Ukraine intensified and oil buyers rejected barrels from Russia.

Crude prices posted their largest weekly gains since the middle of 2020, with the Brent benchmark up 21% not seen since 2013 and U.S. crude gaining 26% not seen since 2008.

Traders were barely able to sell Russian oil all week, with Shell the only notable buyer of a Russian cargo, which was sold at a steep $28-discount to physical Brent crude.

Oil also took support due to delays to the conclusion of Iranian nuclear talks and the potential return of Iranian crude to global markets.

Meanwhile, U.S. oil rigs fell three to 519 in the week to March 4, their first weekly decline since January, data from Baker Hughes showed.

On the speculative side, data from CFTC showed that speculators raised their net long in U.S. crude F&O positions by 8,991 contracts to 283,123 in the week to March 1.

International oil prices spiked early Monday morning in Asian trade after the United States and European allies consider a Russian oil import ban while delays in the potential return of Iranian crude to global markets fuelled tight supply fears.

Technically, WTI Crude Oil above $120 level could see Bullish momentum up to $121.70 -$123.00 levels. Support is at $118.50-$116.00 levels.

Technically, Brent Oil Futures could see upside momentum up to $129.70-$131.00 levels. Support is at $127.00-$125.30 levels.

Domestic crude oil prices could start gap up this Monday morning tracking overseas prices.

Technically, MCX Crude Oil March holds resistance at 8655-8710 levels. Support is at 8564-8500 levels.

U.S. Natural Gas (NG) rose on Friday as cold weather is expected to cover most of the United States for the next 10-days.

Indian Natural Gas (NG) prices also ended higher on Friday.

The late season cooling demand comes when risk appetites for oil and its products have exploded.

Meanwhile, gas rigs rose three to 130, their highest since December 2019, data from Baker Hughes showed.

On the speculative side, data from CFTC showed that speculators cut their net long in NG positions by 4,540 contracts to 133,812 in the week to March 1.

U.S. NG prices have started higher this early Monday morning in Asian trade lifted by geopolitics and cooling demand.

Technically, if NG April contract could trade in a range of $4.85-$5.20 levels in coming session.

Domestic NG prices could start higher this early Monday morning tracking a positive start in the overseas prices.

Technically, if MCX NG March contract holds a strong resistance at 385-393 levels. Support is at 378-373 levels.