Commodities

Oil and natural gas daily review (August 21, 2012)

Contributed by Angel Broking

Crude Oil

Nymex crude oil prices traded on a flat note yesterday before taking cues from expectations of strength in the US economy after more than expected rise in consumer sentiments couple with weakness in the DX. Additionally, hopes that European policymakers will take steps to fight Euro Zone debt crisis also acted as a positive factor for the crude oil prices.

Crude oil prices touched an intra-day high of $96.53/bbl and closed at $96.0/bbl in yesterday's trading session. On the domestic bourses, prices declined by 0.4 percent and closed at Rs.5,324/bbl after touching an intra-day low of Rs.5292/bbl on Monday.

API Inventories Forecast

The American Petroleum Institute (API) is scheduled to release its weekly inventories today and US crude oil inventories are expected to increase by 0.1 million barrels for the week ending on 17th August 2012.

Gasoline stocks are expected to fall by 0.1 million barrels and distillate inventories are expected to rise by 1.3 million barrels for the same week.

News

As per the Organization of Petroleum Exporting Countries (OPEC) report, Saudi Arabia's output has increased by 3 percent to 10.1 million barrels a day in June as compared to May's production. The country has surpassed the Russia which pumped in 9.9 million barrels a day during the same month.

Outlook

In today's session we expect crude oil prices to trade on a sideways note on the back of expectations that US economy is strengthening, positive global market sentiments along with weakness in the DX. While on the other hand, increase in Saudi Arabia's crude oil production coupled with expectations of rise in US crude oil inventories can add downside pressure on the crude oil prices.