Crude oil prices extended their downtrend over the last week, with both international and domestic futures breaching key support levels and hitting three-month lows, according to a report by Akhil Nallamuthu in The Hindu Business Line. Brent crude oil futures on the Intercontinental Exchange (ICE) settled at $80.60/barrel, down 7.7% week-over-week, while crude oil futures on the Multi Commodity Exchange (MCX) for July delivery closed at ₹7,262/barrel, down 8.9%. The sharp declines invalidated important supports, signaling strong downward momentum.
Price Trends
| Contract | Price | Weekly Change | Key Levels |
|---|---|---|---|
| ICE Brent crude futures | $80.60/barrel | -7.7% | Support $73, resistance $86 |
| MCX crude oil futures (Jul) | ₹7,262/barrel | -8.9% | Support ₹7,000, resistance ₹8,000 |
Brent Crude
Brent futures invalidated an important support at $86 early last week, then dropped further to an intra-week low of $76.54 on Thursday before recovering to $80.60. According to the analysis, while the trend is bearish, there is a chance for a corrective rise from the current level. Such a move could take the contract back to $86 or even to the $90-$92 resistance band, where the 21-day moving average now lies. However, after this corrective rise, Brent crude futures are expected to resume their fall, eventually declining to $73. Support below $73 is at $70. In case the contract breaks out of $92, it could rally further to $98. But as it stands, the bias is bearish.
MCX Crude Oil
Crude oil futures (July) opened last week with a gap-down and fell to a weekly low of ₹6,897 on Thursday. On Friday, it recouped some of its losses and ended at ₹7,262. The chart shows that the support at ₹7,000 helped the bulls in putting up a fight. Nevertheless, the outlook remains bearish, although there could be a temporary uptick in price. From the current level, crude oil futures might move up to the ₹8,000-$8,200 price band. But then, this rise can draw fresh selling, eventually leading to another downswing. That fall can drag the contract to ₹6,000. That said, in case crude oil futures break out of ₹8,200, it can turn the outlook positive. Notable resistance above ₹8,200 is at ₹9,000.
Trade Strategy
The report advises traders to stay out for now. It recommends initiating a fresh short position if crude oil futures (July) rise to ₹7,900, with a stop-loss at ₹8,300. When the price drops below ₹7,000, tighten the stop-loss to ₹7,500. Exit the trade at ₹6,500. The strategy reflects the bearish bias while accounting for potential temporary rallies.
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