Sell Crude oil on rally: Karvy Commodities

[Abhishek Sharma]

Oil is trading marginally lower this morning at $94.08, despite the Asian equities trading higher. The euro rose while the dollar index has declined. This shows the weakness in oil is still present, supported by weak fundamentals. As stated in our previous report, gasoline demand in the US is low, pushing oil prices lower and, inventory levels higher. We expect the weakness to persist in the short term. However, any developments from economic activity might restrict the loss in oil today. Also, news releases yesterday reported that the Canadians are joining the US in blocking pipelines, which might aid a slight recovery in oil but, we believe the consequences of this decision will only be noticed in the short term and not immediately.

Source: Crude oil Tips