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Crude oil prices have rallied sharply in recent weeks.

While the WTI crude oil is trading at $60/bbl and Brent crude is trading at $63 a barrel levels.

So far this year, crude oil has increased by 23.6%, however, in year 2020 crude corrected by 20.88%.

In year 2020, the WTI crude oil touched the historical low of -$40 per barrel levels.

Lockdown and travel restrictions across the world had led to a sharp decline in demand of crude oil by 60%, but the demand is recovering with easing of lockdowns and reduction in the number of coronavirus cases leading to a V-shaped recovery in oil prices.

Fresh tensions in the middle east and expectation of increase in demand of crude oil are also currently providing support to the crude oil prices.

Anuj Gupta, deputy vice-president, commodity and currency research at Angel Broking says, “We expect the rally to continue as demand may further increase in crude oil. We are targeting $65 for WTI crude oil and $70 for Brent Crude oil in short term.”

As India is the biggest consumer of crude oil, the surge in prices have led to a spike in prices of petrol and diesel. Petrol price breached  Rs 100 a litre in some states today.

Talking about the impact of higher fuel prices, Gupta says, ” If the crude oil prices further increase in global markets, it will negatively impact India as inflation will spike thus affecting the overall growth.”

As for the trading strategy, Anuj Gupta believes the bull trend in crude oil will continue.

“Traders can go for buy in crude oil on MCX around Rs 4,200 to Rs 4,250 levels with the stoploss of Rs 4,000  and for the target of Rs 4,600 -4,700 per barrel”, said Gupta.