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Commodities Energy

Oil and natural gas daily review (August 18, 2014)

August 18, 2014, Monday, 05:34 GMT | 00:34 EST | 10:04 IST | 12:34 SGT
Contributed by Angel Broking


Crude Oil

Oil prices plunged more than 2 percent last week as the U.S. Energy Information Administration (EIA) reported crude oil inventories rose 1.4 million barrels last week, against expectations stocks would be lower. Exports from Libya are recovering despite the recent unrest, with the first leaving the port of Ras Lanuf on Tuesday after a year-long harbor blockade. Unrest in Iraq has yet to disrupt significant amounts of oil, though some small fields have been shut in the autonomous Kurdish region. The United States has sent around 130 additional military personnel to Iraq as Washington seeks to help Baghdad contain the threat posed by militants. The unrest in Iraq has yet to disrupt supplies from the No. 2 OPEC producer even as the Obama administration has sent about 130 additional military personnel to Iraq as Washington seeks to help Iraq contain the threat posed by hardline militants from the Islamic State.

On the production front, OPEC output rose to a five-month high above 30 million barrels per day (bpd) in July and U.S. crude production averaged an estimated 8.5 million bpd, according to reports from the International Energy Agency and the EIA.

On the MCX, crude prices declined by around 3 percent owing to Rupee appreciation and closed at Rs.5829/bbl.


Outlook

On an intraday basis, we expect crude prices to trade lower on ample supplies in the US and OPEC nations. Also, rising stockpiles in the US will exert downside pressure on prices.

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

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