Commodities » Energy

Oil and natural gas daily review (July 26, 2010)

Contributed by Nirmal Bang

By Nirmal Bang

MARKET ROUNDUP

U.S. crude oil futures ended lower after the release of European bank stress test results but well above the day's lows on Friday, as Wall Street strengthened on positive earnings results and with oil traders cautiously weighing the potential impact of production shut-ins in the Gulf of Mexico ahead of Tropical Storm Bonnie.

IN FOCUS

- Venezuelan President Hugo Chavez threatened on Sunday to cut oil supplies to the United States in case of a military attack from Colombia as a dispute escalated over charges his country harbors Colombian rebels.

- Energy companies were scrambling to restore offshore oil and gas output butalmost 50 percent of daily crude production in U.S.-regulated areas of the Gulf of Mexico was shut as of Sunday due to Tropical Depression Bonnie, the U.S. government said.

- Japan's crude oil imports ticked up in June from a year earlier, government data showed on Monday, but were unchanged year-on-year for the first half of 2010, underscoring weak demand that is expected to continue.

- Cyclone Power Technologies, Inc. has successfully performed combustion acceptability tests of crude oil recovered from the Gulf of Mexico with its awardwinning, heat-regenerative external combustion engine.

- Residents from Pennsylvania, New York, Ohio and West Virginia are urging the Environmental Protection Agency (EPA) to address safety concerns by regulating the booming natural gas industry.

FUNDAMENTAL OUTLOOK

Crude oil nudged up on NYMEX today. Our look for crude remains bullish on the back of improved risk appetite and expectations that a forecast severe Atlantic hurricane season could bring further disruptions to oil and gas operations in the U.S. Gulf of Mexico. We recommend to remain bullish in Crude oil.