| On November 15, Reuters reported that traders felt the sentiment on oil futures globally was bearish owing to a host of reasons. |
| The primary reason cited was the forecast of warmer weather trends for the US North East, as well as a continuing skepticism about producer group OPEC's output. |
| "Oil markets remain unconvinced about fundamentals firming," the report quoted a top analyst. |
| The analyst also added that the said quickening oil demand growth and moves by OPEC's top producers to cut back supplies as part of the group's 1.2 million barrels per day (bpd) curbs should help draw down inventories, but traders have lately been more preoccupied with concerns about the global economy and OPEC compliance. |
| The report added that the six-week rangebound rut has led some speculators to pull out and look for bigger returns elsewhere. |
| What does this meant for us? This meant that oil was bearish, that it was in a six-week rut and investors are opting out for better return markets. For us this meant that Brent and the local MCX crude oil are ready to come out of the "rut" and are about to trend potentially to $61-65 levels for Brent, and potentially back to Rs 3000 on MCX. |
| As we write this, Brent has already moved up to above $60, while MCX prices remain near 2610 levels. We feel the week ahead should see prices spurting locally too. |
| This move stands proof to the fact that the majority is negative at a bottom and the same majority is positive at a top. Now just like bearish stories were printed around $55 on Brent, the reader should see positive stories when oil is making a multi-week top and prepares to fall again. |
| For us, oil is in a multi-month downward move, and now we are playing a small minor move up. Markets work on a host of parameters, and predicting oil takes much more than a weather forecast and demand"�supply workings. |
| (Contributed by Orpheus Capitals, a global alternative research company) |
| Click here for complete report |
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