Crude Prices Rally, But Analysts Warn of Potential Barrier Ahead
Crude oil prices have been rising sharply over the last week, fueled by an uptick in demand. Brent crude oil futures on the Intercontinental Exchange (ICE) rallied 9.3% to $96.30/barrel, while domestic crude oil futures rose 7.4% to ₹8,578/barrel.
However, analysts caution that there is a potential barrier ahead at $98, where a rising trendline coincides. This could trigger a price correction, possibly to $90.50, its 21-day moving average. Subsequent support is at $88.75, with a breach of this potentially turning the outlook bearish.
On the other hand, if Brent crude futures breaks out of $98, it can extend the rally to $101.50, potentially lifting the contract to $110. In the domestic market, MCX Crude Oil (₹8,578) is likely to moderate before its next upswing, possibly dipping to ₹8,085 where the 21-day moving average lies.
A trade strategy suggests buying crude oil futures if the price dips to ₹8,100, with a target and stop-loss of ₹9,000 and ₹7,800 respectively.