Oil prices crashed last week, posting their biggest weekly loss since March 2020. Brent crude futures fell sharply, hitting a two-month low of $93.22 on Wednesday. Domestic crude oil futures also plunged 14.9 per cent. Experts said the market bias remains bearish, as strong selling pressure continues to hurt prices.
Oil prices crashed last week, posting their biggest weekly loss since March 2020.
Brent crude oil futures on the Intercontinental Exchange (ICE) ($98.30/barrel) tumbled 13.3 per cent, slipping below the $100-mark and snapping the recovery seen in recent weeks.
Crude oil (Nov) futures in the domestic market (₹8,459/barrel) plunged 14.9 per cent.
Brent futures ($98.30)
Brent crude futures fell sharply, marking a two-month low of $93.22 on Wednesday. However, despite witnessing one of the steepest declines in recent years, the contract managed to close above the crucial support at $98.
While a minor recovery is possible, the contract is unlikely to sustain a rally beyond $105, a notable resistance. Given the prevailing bearish momentum, we expect Brent futures to resume the decline either from the current level of $98.30 or after a temporary rebound towards $105.
Once the decline resumes, the contract can slip below the recent low of $93.22 and extend the downswing to $90 and subsequently to $86.
For the outlook to turn positive, Brent futures should break above $105 and sustain the rally. However, such a move appears less likely at present, given the strong selling pressure.
MCX Crude Oil (₹8,459)
Crude oil (Nov) futures crashed below ₹9,000 and is now trading beneath both the 21- and 50-day moving averages, indicating a deterioration in the short-term trend.
The weekly loss of 14.9 per cent was the steepest since the second week of April this year, when the contract declined 15.1 per cent.
The nearest support is at ₹8,300. A recovery from this level could trigger a temporary rebound towards ₹9,000. However, the ₹9,000-9,300 band is expected to act as a strong resistance zone, potentially limiting the upside.
Crude oil futures could resume the decline either from the current level or after a rebound towards ₹9,000.
Once the fall resumes, the contract can slide to ₹7,600. If the selling pressure persists, the downtrend could extend further, dragging the price to ₹7,000.
Overall, the bias remains bearish, with any recovery likely to be short-lived.