Commodities » Energy
Oil and natural gas daily review (December 05, 2013)
Nymex crude oil prices gained around 1.2 percent yesterday on the back of more than expected decline in US crude oil inventories. Further, stretching of Keystone pipeline managed by TransCanada from Gulf of Mexico to Cushing Oklahoma supported an upside in the oil prices.
Additionally, strength in the DX along with Organization of Petroleum Exporting Countries (OPEC) maintaining its production quota at 30 million barrels a day could not restrict positive movement in oil prices. Crude oil prices touched an intra-day high of $97.58/bbl and closed at $97.2/bbl in yesterday’s trading session.
On the domestic bourses, prices rose by 0.5 percent and closed at Rs.6042/bbl after touching an intra-day high of Rs.6105/bbl on Wednesday. Rupee appreciation capped sharp gains in prices on the MCX.
EIA Inventories Data
As per the US Energy Department (EIA) report, US crude oil inventories declined more than expected by 5.59 million barrels to 385.81 million barrels for the week ending on 29th November 2013.
Gasoline stocks gained around 1.83 million barrels to 212.40 million barrels and whereas distillate stockpiles rose by 2.65 million barrels to 113.50 million barrels for the last week.
EIA Inventories Forecast
US Energy Information Administration (EIA) is scheduled to release its weekly inventories and US natural gas inventory are expected to decline by 141 billion cubic feet (bcf) for the week ending on 29th November 2013
From the intra-day perspective, we expect crude oil prices to trade on a positive note on the back of decline in US crude oil inventories after snapping gains for 11 consecutive weeks. Further, forecast for favorable GDP data from the US in the evening session will lead to estimates of rise in demand for the fuel which will support an upside in the prices. Additionally, stretching of Keystone pipeline will act as a positive factor. However, sharp upside will be capped due to weak market sentiments, concerns of QE tapering along with strength in the DX. In the Indian markets, Rupee appreciation will restrict sharp positive movement in oil prices.
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