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Commodities Energy

Oil and natural gas daily review (August 28, 2014)

August 28, 2014, Thursday, 06:49 GMT | 01:49 EST | 10:19 IST | 12:49 SGT
Contributed by Angel Broking


Crude Oil

Oil prices declined on both sides of the Atlantic as expectations of ample supply weighed on prices. Global oil supply is expected to exceed demand this year, cooling prices. Oil futures on both sides of the Atlantic Basin are on track to post a second monthly decline.

Hopes that the presidents of Russia and Ukraine could reach a ceasefire deal dimmed after Ukraine accused Russia of launching a new military incursion across its eastern border on Wednesday. U.S. crude stocks fell 2.1 million barrels last week, more than expected, but Cushing inventories rose 508,000 barrels, data from the Energy Information Administration showed on Wednesday.

On the MCX, crude prices declined by around 0.4 percent in line with weakness in international markets and closed at Rs.5675/bbl.


Natural gas

Natural gas prices on the NYMEX gained by around 1 percent on bargain buying at lower levels while MCX futures gained by around 1.09 percent and closed at Rs.241.40/Mmbtu.

EIA Natural gas inventories due tonight is expected to show a surplus of 78Bcf of gas.


Outlook

On an intraday basis, we expect crude oil prices to trade lower on ample supplies in crude markets. Besides, there is no threat to actual supplies due to tensions between Russia and Ukraine. Oil prices will continue to trade lower unless there are fresh set of factors on the demand side.

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