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Commodities Energy

Oil and natural gas daily review (August 22, 2014)

August 22, 2014, Friday, 05:08 GMT | 00:08 EST | 08:38 IST | 11:08 SGT
Contributed by Angel Broking


Crude Oil

WTI oil prices declined on Thursday heading for a straight second weekly loss as easing geopolitical risks and higher global oil supply pressured prices. U.S. crude production has reached the highest in 28 years due to a shale oil boom. The Organization of the Petroleum Exporting Countries pumped more oil in July despite conflicts in the Middle East and Africa.

Libya is gradually ramping up its oil production after reopening several eastern ports. It loaded a second tanker at its largest oil export terminal at Es Sider this month after being shut for a year. Exports from Iraq remained near record volumes despite the Islamic insurgency in the north. Crude is also exported from Iraqi Kurdistan via Turkey in defiance of Baghdad.

On the MCX, crude prices gained by around 0.8 percent and closed at Rs.5745/bbl.


Natural Gas

U.S. natural gas futures jumped nearly 2 percent on Thursday as traders looked beyond a bearish build in stockpiles to focus on warm weather forecasts in the near-term that could bump up the use of gas to generate power for air-conditioning.

On the MCX natural gas prices gained by around 1.33 percent and closed at Rs.235.40/Mmbtu.


Outlook

On an intraday basis, we expect crude prices to trade on a negative note as ample supplies in crude markets and declining money manager’s interest in the commodity is exerting downside pressure on prices. Also, Libya is ramping up its production ensuring that supplies are ample from the nation.

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