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Commodities Energy

Oil and natural gas daily review (August 21, 2014)

August 21, 2014, Thursday, 05:48 GMT | 00:48 EST | 09:18 IST | 11:48 SGT
Contributed by Angel Broking


Crude Oil

WTI crude oil prices rose in choppy trading on Wednesday on account of September contract expiration and after government data showed crude stocks in the United States fell sharply last week.

U.S. crude stocks slid by 4.5 million barrels last week, the U.S. Energy Information Administration (EIA) said, more than analysts had expected. Stocks in Cushing, Oklahoma - the delivery point for the U.S. crude contract - rose by 1.76 million barrels. Gasoline stocks rose 585,000 barrels against expectations for a drop while distillate stocks fell 960,000 barrels, slightly more than forecast.

U.S. crude futures have been pressured by growing supplies of light-sweet oil from booming North American output, hitting a seven-month low of $94.26 on Tuesday.

On the MCX, crude prices gained by around 0.04 percent and closed at Rs.5699/bbl.


Natural gas

Natural gas prices declined by around 1 percent on expectation of build up in storage and moderate climate expectations. On the MCX, natural gas prices declined by around 1.94 percent and closed at Rs.232.30/MMbtu.

Inventory report due today is expected to trade a surplus of 83Bcf and this can exert downside pressure on prices.


Outlook

On an intraday basis, we expect crude prices are expected to trade on a lower note on ample supplies in North America and strength in the dollar index. Despite geo-political violence there has been no threat to actual supplies from any part of the globe and this can exert downside pressure on prices.

Meanwhile, there are host of data sets to be released in the evening session which can decide further trajectory of crude prices.

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