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Commodities Energy

Oil and natural gas daily review (August 01, 2014)

August 1, 2014, Friday, 07:00 GMT | 02:00 EST | 10:30 IST | 13:00 SGT
Contributed by Angel Broking


Crude Oil

WTI crude oil declined by around 1.5 percent on Thursday hitting the lowest level since March on news of a potentially lengthy shutdown at a Kansas oil refinery, while Brent also slipped amid signs of robust OPEC oil production.

CVR Refining CVRR.N said its 115,000-barrel-per-day refinery in Coffeyville, Kansas might be shut for as long as four weeks after a fire in a gasoline-related unit on Tuesday. The refinery is a major consumer of benchmark West Texas Intermediate (WTI) crude. A lengthy shutdown of the Coffeyville refinery could temper demand for WTI crude. Rising gasoline stockpiles in the United States, even during the peak summer driving season, have raised concerns about the demand outlook in the world's largest oil consumer.

On the MCX crude prices declined by 1.1 percent taking weak cues from international markets and closed at Rs.6006/bbl.


Natural Gas

After falling last week for the sixth consecutive week, in the longest stretch of weekly declines in more than four years, natural gas prices on the NYMEX gained by more than 2.5 percent yesterday. Utilities added 88 BCF of gas in storage versus an expectation of 93 BCF which acted as a boost for prices.

On the MCX, gas prices gained by around 3.8 percent taking strong cues from international markets and closed at Rs.237.60/MMBtu.


Outlook

Oil prices have steadily eased after hitting multi-month highs in June on world political tensions. However, ample supplies of crude by the OPEC, rising supplies in the US, build up of gasoline inventories in the US and lengthy shutdown at a Kansas oil refinery are all indications that crude prices will correct further in today’s session.. Meanwhile, In Europe, traders are watching how sanctions will affect oil exports from Russia.

The head of Russia's second-largest oil producer Lukoil said Western sanctions would force the company to reduce its investment program.

On the MCX, crude oil prices are expected to trade on a negative note taking cues from weak international markets.

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