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Commodities Energy

Oil and natural gas daily review (December 09, 2013)

December 9, 2013, Monday, 04:28 GMT | 23:28 EST | 08:58 IST | 11:28 SGT
Contributed by Angel Broking


Crude Oil

Nymex crude oil prices gained by more than 5 percent in the last week on the back of decline in API and US crude oil inventories after snapping a gains for eleven consecutive weeks. Further, expectations of stretching of new pipeline from Gulf of Mexico to Cushing, Oklahoma to be started by first week of January 2014 supported an upside in the prices.

Additionally, estimates of rise in demand for the fuel, after favorable economic from the US in the previous week coupled with weakness in the DX acted as a positive factor for the prices. Crude oil prices touched a weekly high of $98.07/bbl and closed at $97.7/bbl in the last trading session of the week.

On the domestic bourses, prices gained around 2.4 percent and closed at Rs.5981/bbl on Friday after touching a weekly high of Rs.6105/bbl in the last week. Rupee appreciation capped sharp gains in the prices.


Natural Gas

On a weekly basis, Nymex natural gas prices gained around 4.3 percent on the back of more than expected decline in US natural gas inventories. Further, forecast for cool winter weather conditions supported an upside in the prices.

Additionally, weakness in the DX acted as a positive factor. Gas prices touched a weekly high of $4.199/mmbtu and closed at $4.122/mmbtu in last trade of the week.

In the Indian markets, prices surged around 2.7 percent during the week and closed at Rs.253.40/mmbtu on Friday after touching a high of Rs.254.5/mmbtu in the last week. Rupee appreciation capped sharp gains in the prices.


Outlook

From the intra-day perspective, we expect crude oil prices to trade higher on the back of estimates of rise in demand for the fuel after favorable GDP and employment data from the US in the last week. Additionally, decline in US and API crude oil inventories after gains for eleven consecutive weeks will support an upside in the prices. Further, upbeat market sentiments coupled with weakness in the DX will act as a positive factor. In the Indian markets, Rupee appreciation will restrict sharp positive movement in the prices.