ENERGY | Rebound
While crude oil is expected to trade with a positive
bias, fresh longs should be avoided at elevated
levels, says Dharmesh Bhatia, Manager Commodities Market, Emirates NBD Securities
L
28
ast month, the international benchmark Brent crude jumped by 5%
and quoted at $37 while the US
benchmark WTI (West Texas Intermediate)
reached at the peak of $34.69. However,
later this rally was supported by fundamentals and prices rallied further. Major
upheaval in prices has been witnessed
so far during the current year. The Brent
was dropping to a 12 year-low of $27.10
a barrel in January before embarking on
an uneven recovery. Daily swings of more
than 7% have been recorded on four
occasions in February alone. Between
2012 and 2013, when oil averaged close to
$100 a barrel, there was only one trading
day when Brent moved 7% over the entire
period.
In the second of weak of March, 5%
jump was witnessed with assumption
about supply crunch in the global market
because of disruptions in the pipelines
of Iraq and Nigeria. The stoppage in the
pipeline of Turkey cut off about 600,000
www.wealth-monitor.com | April 2016