Buy Crude oil, suggests Karvy Commodities

Karvy Commodities Broking's research report on crude oil -

According to the US Energy department, crude oil stocks are expected to fall by more than 800,000 barrels in the week ending on 17th May while refineries probably operated at 88.4% capacity ahead of the summer driving season. Therefore, oil prices are expected to take positive cues, backed by the declining storage level. At present, most of the Asian equities are trading slightly lower, backed by yesterday’s negative close in the US market, which might be keeping a cap on gains in oil prices. As the day progresses, we expect oil prices to open slightly lower at the MCX, backed by a strong Indian rupee. Going ahead, German producer prices should fall, unlike the UK’s consumer prices, keeping the euro under pressure and limiting gains in commodity prices, including crude oil. However, volatility in prices might be seen in the evening as the New York Fed President William C Dudley speaks on the challenges that Japan and the US have faced in operating the monetary policy at zero-interest rate levels following the major financial crises. The Fed Chairman Bernanke’s speech tomorrow and the FOMC minutes will be highly anticipated by market participants. The BOJ’s rate decision should also influence market participants. However, ahead of these major developments, we expect the markets to remain sluggish in today’s session. From a technical perspective, we suggest remaining on the buying side for the day.

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