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Commodities Energy

Oil and natural gas daily review (August 07, 2014)

August 7, 2014, Thursday, 07:26 GMT | 02:26 EST | 10:56 IST | 13:26 SGT
Contributed by Angel Broking


Crude Oil

Ample supplies in the US led the WTI contract to fall close to the lowest in six months while Brent prices traded at nine month lows. Prices saw some early support from a U.S. government report showing that U.S. crude inventories fell 1.8 million barrels last week and gasoline stocks dipped sharply.

But the rebound halted in the later part of the trade and both benchmarks pared gains shortly after reports emerged that near 100 rail-cars arrived at the Stroud, Oklahoma unloading facility on Wednesday, the first train to arrive this month at the terminal connected to Cushing.

Despite prolonged violence in several key oil-producing regions, traders have become increasingly nervous about weak seasonal demand and poor refinery margins in a global market that is well supplied with high quality, light crude oil.

On the MCX, crude price gained marginally by 0.2 percent as rupee weakness cushioned prices and closed at Rs.5957/bbl

EIA inventory update

The EIA released its weekly inventories report last night and US crude oil inventories declined by 1.8 million barrels for the week ending on 1st Aug2014. Gasoline stocks declined by 4.4 million barrels whereas distillate inventories fell by 1.8 million barrels for the same time period.


Outlook

On an intraday basis, we expect crude oil prices to trade lower following its weakness in the recent weeks as ample supplies are flooded in crude markets with poor refinery margins in global market. Although, crude oil markets are bothered with prolonged violence in key producing regions coupled with heightened geo-political tensions, crude markets are behaving as per the fundamentals of demand and supply.

On the MCX, crude prices are expected to trade sideways as rupee weakness will cushion sharp downside in prices.