Crude may see USD 102-108/ bbl

Nifty BSE | NSE 25/05/12 Are Mutual Funds betting on Nifty?

By Manisha Gupta, CNBC-Awaaz, Commodities Editor.

 

Gustav threat is no longer there but the markets are watching at Hanna, we are into a peak hurricane season that may continue till November 30. Gustav of course has been dropped from a category three hurricane to a tropical storm, it hasn't made too much of a damage but it would take 3-5 days to get operations back into system, a lot of key waterways are shut and that might disrupt supplies a bit but not too much of an impact of what the prices are taking from that. But Hanna is very closely following Gustav and we have seen another tropical depression forming over Atlantic Ocean.

 

So those are the couple of things that markets would be touching at but important levels happening there. We are trading below USD 110/bbl at this point in time that is an important one, I think when US markets open after a long weekend today you might see some more selling happening into the prices, USD 108-102/bbl are the kind of levels that you might see in this week itself in case of crude prices.

 

Crude continues to fall and nearly USD 7/bbl down at this point time trading below USD 109/bbl and the selling is already happening here. The European and the US markets are yet to open, it is the strength in US dollar also trading at 8-months high against the major basket of currencies. The US dollar index is above 77 at this point in time.

 

We have seen a major sell off happening into commodities and the kind of decline that you are seeing in crude prices right now, may lead to a decline in precious metals and base metal prices as well as the day proceeds today.