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Commodities » Energy

Oil and natural gas daily review (April 23, 2014)

April 23, 2014, Wednesday, 05:58 GMT | 00:58 EST | 10:28 IST | 12:58 SGT
Contributed by Angel Broking


Crude Oil

WTI crude oil prices tumbled on Tuesday on concerns about US crude oil supplies in the US could near or even exceed the oil time highs. Brent also fell but was cushioned by continued concerns of an escalation in the standoff in Eastern Ukraine that could lead to further Western sanctions against Russia and disrupt supplies from one of the world's biggest producers.

Stocks in the country are approaching all-time highs - after building 10 million barrels in the week ending April 11 they reached 394 million barrels, close to the record 398 million barrels hit last year.

Meanwhile, Money managers held a near-record bullish bet on Nymex crude futures valued at $34.4 billion last week, according to the CFTC and this can act as a positive factor for upside in prices.

API inventories Update

The API is scheduled released its weekly inventories report last night at 8:00pm IST and US crude oil inventories gained by 0.51 million barrels for the week ending on 18th April 2014. Gasoline stocks fall by 3.4 million barrels whereas distillate inventories increased by 0.57 million barrels for the same time period.

EIA inventory forecast

The EIA is scheduled to release its weekly inventories report today at 8:00pm IST and US crude oil inventories is expected to gain by 2.7 million barrels for the week ending on 18th April 2014. Gasoline stocks are expected to fall by 1.6 million barrels whereas distillate inventories are expected to have remained unchanged for the same time period.


Outlook

On an intraday basis, crude prices are expected to trade sideways as money managers continue their bullish bets on crude whereas crude inventories in the US are at all time highs. Also, in the absence of a major escalation in Eastern Ukraine, where separatists still hold government buildings in defiance of a peace accord struck last week, attention instead has turned to U.S. crude oil inventories.

On the MCX, crude prices are expected to trade sideways as prices cues further will be taken from the data releases from the US tonight.