Crude Oil
Crude oil prices rose by 0.5 per cent to $78.48 on Monday amid volatility tied to hopes for an end to the Gaza conflict. While Hamas accepted a ceasefire proposal from Qatar and Egypt, Israeli Prime Minister’s rejection dampened optimism.
Despite this, bullish factors like Saudi Arabia’s price hike for Asia and technical indicators suggest last week’s drop was excessive. OPEC and allies are likely to continue supply cuts to prevent oversupply.
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MCX Crude Oil – May | Buy on Dips around 6,500; Stop-loss: 6,400; Target: 6,700
Copper
Copper gained for a second consecutive day, bolstered by a raised price forecast from Goldman Sachs and growing optimism about potential Federal Reserve rate cuts this year. Expectations of the Fed’s shift in 2024 also boosted overall market sentiment.
Soft US jobs data prompted investors to anticipate rate cuts sooner, with swap markets now indicating a 53 per cent chance of reduction by year-end, up from around 40 per cent in April’s end.
Copper reached $10,065.50 a ton on the London Metal Exchange, while aluminum, tin, and zinc also saw over 1 per cent increases. The metal’s rally this year, up by 18 per cent, is driven by expectations of high demand from green industries amid potential supply challenges for global miners.
MCX Copper – May | Buy on dips around 857; Stop loss: 850; Target: 870
Natural Gas
Natural Gas emerged on Monday, driven by an upward trend and positive momentum after breaking key trend lines. Hot weather in Texas and the South boosted demand, while a bearish outlook persists elsewhere, leading to volatile conditions.
Increased feedgas usage by Freeport LNG contributed to the price rise. However, a significant storage build reported by the Energy Information Administration suggests a potential supply surplus.
Reductions in active drilling rigs add complexity to supply forecasts. The upcoming launch of the LNG Canada project might reshape North American gas trade. The long-term market outlook remains bearish despite rising temperatures.
Traders should closely monitor weather developments and adjust strategies accordingly.
MCX Natural Gas – May | Buy on dips around 180; Stop-loss 175; Target: 190
(Neha Qureshi is a senior manager, technical research of commodities & currency at Anand Rathi. Views expressed are her own)
