Weekly Outlook on Crude Oil - 3 Oct 2022

WTI Crude Oil prices have rebounded about 5% in the past two sessions after making an eight month low at $76.20 on Monday as hurricane in the Gulf of Mexico caused disruptions in U.S. crude supply. Moreover, the prices were also supported by the surprising drawdown in the U.S. crude inventories last week. The investors are also keeping an eye on Chinese manufacturing data and upcoming OPEC meetings.

Fear of an economic slowdown in most of the major countries also battered crude oil prices with the prospect of more demand destruction. 
 
WTI crude oil prices jumped 3% for the week, their first weekly rise since August. While, Brent oil inched up by 4.2% from its weekly low of $82.45. Technically, the price has shown some pullback moves but still holds the bearish tone. However, traders are expecting some output cuts from the OPEC meeting to support prices further. On a weekly chart, the price has taken support at a 100-week SMA and Lower Bollinger Band formation that suggests a pullback in the counter while hovering below the Ichimoku Cloud formation, which indicates a bearish trend for the long term. A momentum indicator RSI also witnessed negative divergence and MACD showed negative crossover on a weekly time frame. Hence, we are expecting a bearish move in crude oil for the coming week. On the downside, it may test the support around $73 and $68 levels, while on the upside; price may find the resistance at $90 & $94 levels. 

                                                           Weekly outlook on Crude oil

On the MCX, the oil price witnessed a sharp recovery from the immediate support of Rs. 6300, gaining more than 7% from the weekly low. Profit bookings in dollars from 20 year highs and hope of an output cut, supported the prices for the week. After the recent pullback, yesterday the price has formed a Doji candlestick on the daily chart that indicates indecisiveness among traders. Moreover, the price has been trading below Rs. 6730, 61.8% Retracement Levels that act as a resistance zone for the near term.

However, an indicator, Williams%R, and Chaikin Oscillator, showed positive indications. So, based on the above mixed parameters, we are expecting sideways to bearish moves in the coming days. Hence, traders are advised to sell on a rise strategy with proper SL & target. On the downside, it has support at 6290 & 6000 levels, while on the upside, immediate resistance is at 6730 levels and the next resistance comes at 7050 levels.

Important Key Levels: