Carrying over from the negative sentiment created by weaker than expected US Employment report last week, crude oil started the week on a lower note, but then steadily increased for the week.

Prices rose on 4 out of 5 days of the week. Oil inventories at US declined 1.8 mln barrels this week compared to 0.9 mln barrels decline last week which indicated that demand at the largest crude oil consuming nation might be increasing. Again, speculation of a surge in Chinese exports data indicating a pick up in demand from the world’s fastest growing economy also boosted the sentiment. Crude prices rose to $75.48 on Thursday from $71.51 close of last week.

However, on Friday, prices corrected. Weaker than expected US retail sales data sparked speculations of a weaker recovery in US which led to a fall in crude prices to the extent of 2.25% to close the week at $75.48.

Though key numbers from US do not paint a good picture, but inventories are expected to decline due to high demand season. Also good numbers from developing economies are expected to keep the sentiments high. Thus we expect crude to trade with a positive bias for the next week.

Author:Praveen Bajaj