Views on Crude Oil - Feb 21, 2022 - Reliance Securities

Mr. Sriram Iyer, Senior Research Analyst at Reliance Securities

International oil prices ended mixed on Friday as investors weighed a potential supply disruption resulting from the Russia-Ukraine crisis against the prospect of increased Iranian oil exports.

Brent ended with gains, while NYMEX ended in the red.

Domestic crude oil and Energy Index futures ended marginally in the green tracking Brent prices on Friday.

Fears over possible supply disruptions resulting from the Russian military presence at Ukraine's borders continued to support prices.

However, further upside was capped amid talks that a U.S.-Iranian deal to revive Iran's 2015 nuclear agreement with world powers was close, but success depended on the political will of those involved.

However, the deal will be done in phases and the first does not include waivers on oil sanctions, so, Iranian crude may not return to the market in the short term.

Adding pressure onto WTI, U.S. drillers added 4 oil rigs this week, with the rig count, an indication of future production, rising to 520, its highest since April 2020, energy services firm Baker Hughes said.

Meanwhile, data from CFTC showed that money managers cut their net long U.S. crude F&O positions by 52 contracts to 295,336 in the week to February 15.

International oil prices have started weaker this early Monday morning in Asian trade however, rising jitters over potential conflict between Russia and Ukraine kept downside capped.

Technically, if WTI Crude Oil trades below $90.00 level could witness a Bearish momentum up to the support zone at $89.00-$87.55 levels. Resistance zone is at $90.33-$91.00 levels.

Brent Oil Futures could see downside momentum up to $90.0-$88.70 levels. Resistance is at $91.00-$92.87 levels.

Domestic crude oil prices could start weaker this early Monday morning, tracking a negative start in the international prices.

Technically, MCX Crude Oil March holds resistance at 6770-6840 levels. Support is at 6715-6670 levels.

Natural gas prices ended lower on Friday but finished the week in the green.

The weather is expected to be colder than normal in the mid-West and West Coast for the next 2-week.

The colder air should increase natural gas demand.

In the latest week, the natural gas rig count increased by 6 units, their biggest weekly gain since May 2021, to 124, their highest since December 2019.

Meanwhile, data from CFTC showed that speculators cut their net long U.S. NG F&O positions by 50,539 contracts to 140,816 in the week to February 15.

International Natural Gas (NG) prices have started with solid gains this early Monday morning in Asian trade lifted by rebounding demand amid cold weather expectations.

Technically, if NG March contract trade could trade in a range of $4.400-$4.650 levels in this Monday's session.

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

Technically, if MCX NG February holds a strong resistance at 337.00-342.00 levels. Support is at 331.00-327.00 levels.