Crude oil prices declined last week. Brent crude oil futures on the Intercontinental Exchange (ICE) ($62.80/barrel) lost 3.1 per cent. Whereas the crude oil futures on the MCX (₹5,203/barrel) was down 1.1 per cent.
Brent futures ($62.80)
The attempts to break out of the resistance at $66 did not bear fruit and the bulls seem to be losing control to the bears. The Brent crude oil futures saw a decline last week and led to a weekly close below a minor support at $63.
The prevailing price action indicates weakness and so, the likelihood of a fall is high. The contract can drop to $60 and $58.50, notable support points.
In case the contract recovers and rallies past $66, it can extend the upswing to $68. A breakout to $68 can turn the outlook positive, potentially lifting the contract to $75.
MCX-Crude oil (₹5,203)
Crude oil futures (Jun) lost 1.1 per cent last week. However, it manages to stay within the horizontal price band of ₹5,170-5,500.
But the price action shows that the contract has lost the bullish bias after failing to move beyond the barrier at ₹5,500 for two weeks. The prolonged consolidation has started giving bears some hope.
As it stands, there is a good chance for crude oil futures to slip below ₹5,170 and move further down to ₹4,750 in the near term.
But if the contract regains traction and rises above ₹5,500, it can appreciate to ₹6,100 quickly.
Trade strategy: Short crude oil futures (Jun) at the current level of ₹5,203. Target and stop-loss can be ₹4,750 and ₹5,460 respectively.
Published on May 31, 2025
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