Crude oil surged in early 2022 due to the Russian-Ukrainian conflict. It lost momentum and reversed the trend. Still, there could be a corrective rally before the downtrend resumes.

One of the main reasons why oil prices fell in 2022 was the fear of a recession and the resulting demand crisis. Nevertheless, prices ended on the bright side during the year. Indeed, Brent futures and the continuous crude oil contract on the Multi Commodity Exchange (MCX) ended the year with gains of 10.1 and 16.5% respectively, closing at $85.65 and Rs. 6,555 per barrel.

While Brent crude appreciated by 1.3% in the last week of 2022, MCX crude futures lost 1%, the rupee posted a marginal gain of 0.2% against the dollar and part of the international market recovery occurred after the closure of the internal market. Brent futures crossed the $85 mark last week. But he does have a resistance at $90 where the 20-week moving average coincides.

Brent futures can reverse either starting at $90 or after a rally to $100. As a result, the price could fall back to $75. If this level is removed, the contract could extend the drop to $65. Before the end of the year, prices may fall in the region of Rs. 4 700-4850. Support under Rs. 4,700 is at Rs. 4,300.