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Commodities Energy

Oil and natural gas daily review (August 05, 2014)

August 5, 2014, Tuesday, 07:44 GMT | 03:44 EST | 12:14 IST | 14:44 SGT
Contributed by Angel Broking


Crude Oil

Oil prices climbed on both sides of the Atlantic with WTI gaining 0.4 percent and Brent rising by 0.2 percent as investors shifted their attention from worries about swelling supplies to concerns about ongoing violence in Libya and other global hotspots.

Buyers were lured back by fears of growing oil supply disruptions due to escalating violence in Libya and Iraq, both major producers, and the crisis in eastern Ukraine, where Russian-backed separatists are fighting Ukrainian government troops.

In Libya, oil output dropped to around 450,000 barrels per day (bpd) from 500,000 bpd last week, but a spokesman for the state-run National Oil Corp said oilfields were still secure despite clashes between rival factions in the capital, Tripoli.

On the MCX, crude prices gained by 0.7 percent and closed at Rs.6014/bbl.

API inventory Forecast

The EIA is scheduled to release its weekly inventories report tonight and US crude oil inventories is expected to decline by 1 million barrels for the week ending on 1st Aug 2014. Gasoline stocks are expected to remain unchanged, whereas distillate inventories are expected to increase 0.8 million barrels for the same time period.


Outlook

On an intraday basis, we expect crude prices to trade sideways to positive as investors shift their attention towards escalating violence in Libya creating a supply side constraint while the crisis in Ukraine still bothers energy markets.

Meanwhile, the host of PMI data sets to be released throughout the day from the US, Euro-zone will drive the trajectory of crude oil prices.

On the MCX, crude prices are expected to trade sideways taking cues from international markets.

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