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Commodities Energy

Oil and natural gas daily review (August 19, 2014)

August 19, 2014, Tuesday, 05:35 GMT | 00:35 EST | 10:05 IST | 12:35 SGT
Contributed by Angel Broking


Crude Oil

Oil prices plunged 1 percent yesterday as Hedge funds and other big speculators cut their bets on rising Brent crude oil prices to the lowest level in two years owing to ample supply despite fighting in Libya and Iraq.

Also, Iraqi and Kurdish forces recaptured Iraq's biggest dam from Islamist militants with the help of U.S. air strikes to secure a vital strategic objective in fighting that threatens to break up the country.

In addition, Global supplies remain ample, and market participants are now worried that demand is too low to keep up with supplies. According to the state-owned National Oil Co, Libya's production jumped to 550,000 barrels a day, up from 400,000 barrels a day last week.

API inventory Forecast

The API is scheduled to release its weekly inventories report tonight and US crude oil inventories is expected to decline by 1.5 million barrels for the week ending on 15th Aug 2014. Gasoline stocks are expected to decline by 1.7 million barrels, whereas distillate inventories are expected to fall by 0.2 million barrels for the same time period.


Outlook

On an intraday basis, we expect crude prices to trade lower on ample supplies in the US and OPEC nations.

Further direction to prices will be provided by API inventory data tonight.

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

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