Looking to invest? This commodity is set to give 74% return by April end
As one lot of crude oil at MCX required Rs 51,000 investment, one can expect up to Rs 38,000 return in next two months time frame, say experts.
On account of sanctions on Venezuela, Iran and Russia announced and output cut, the crude oil prices are expected to go beyond $70/barrel in near future. In domestic Multi Commodity Exchange (MCX), the crude oil prices which are oscillating around Rs 4,020 per barrel, the crude oil prices are expected to touch around Rs 4,300 to Rs 4,400 per barrel by end of April. Since the margin money required for crude oil investment at MCX is 12.69 per cent means near Rs 51,000 and investor can expect to gain up to Rs 38,000 or 74 per cent on his investment in next two and half months, say experts.
Speaking on the crude oil outlook Anuj Gupta, Deputy Vice President — Commodity and Forex at Angel Broking told Zee Business online, "Due to sanctions on Iran, Venezuela and Russian government's announcement to cut its oil output, the Brent crude oil prices which are around $66/barrel are expected to break the $70/barrel in two to three weeks time." Giving outlook of crude oil at the MCX, Anuj Gupta of Angel Broking told that by April end the crude oil prices at the MCX are expected to touch around Rs 4,300 to Rs 4,400 per barrel.
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Standing in sync with Anuj Gupta of Anbgel Broking; Anindya Banerjee, Research Analyst — Derivative and Currency at Kotak Securities said, "Due to rising on global crude oil prices, Indian government will have to invest more dollar to meet its oil demands and hence the Reserve Bank of India (RBI) won't be able to continue its buy-back strategy to keep rupee below 72/dollar levels. I am expecting the rupee to first break the 72/dollar levels in next one month and later in next two to three weeks or by end of March it would soon touch 73/dollar levels." He said that the rise in oil prices and ongoing Indo-Pak tension, the rupee may further crash and make new low if the oil prices don't stop to climb in global merchandise.
Elaborating upon the investment strategy in crude oil at MCX Anuj Gupta of Angel Broking told, "In MCX, one needs near Rs 51,000 to buy one lot of crude oil as margin money required for crude oil investment is 12.69 per cent. Since one lot consists of 100 barrel and currently crude oil is around Rs 4,020 per barrel. So, the rise of one rupee means a gain of Rs 100. Hence, an investor can expect gains up to Rs 38,000 or near 74 per cent on an investment of Rs 51,000."
However, the Angel Broking expert advised that investments are subject to market risk hence an investor must maintain a stop loss at around Rs 3,870/barrel levels.