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Commodities Energy

Oil and natural gas daily review (December 10, 2013)

December 10, 2013, Tuesday, 05:16 GMT | 00:16 EST | 09:46 IST | 12:16 SGT
Contributed by Angel Broking


Crude Oil

Nymex crude oil prices declined around 0.3 percent yesterday on the back of expectations that members of Libya’s Al Magharba tribe located in east part of the country will meet today and discuss about reopening of closed oil export terminals. Further, decline in industrial production data from the Germany acted as a negative factor.

However, sharp downside in the prices was restricted due to weakness in the DX along with favorable economic data from the US in the last week raising hopes for increase in demand for the fuel. Crude oil prices touched an intra-day low of $97.10/bbl and closed at $97.12/bbl in yesterday’s trading session.

On the domestic bourses, prices slipped around 0.5 percent due to Rupee appreciation and closed at Rs.5953/bbl after touching an intra-day low of Rs.5933/bbl on Monday.

API Inventories Forecast

The American Petroleum Institute (API) is scheduled to release its weekly inventories today and US crude oil inventories are expected to decline by 2.7 million barrels for the week ending on 6th December 2013.

Gasoline stocks are expected to gain by 1.7 million barrels and distillate inventories are expected to shoot up by 1.5 million barrels for the same week.


Outlook

From the intra-day perspective, we expect crude oil prices to trade higher on the back of forecast for decline in API crude oil inventories. Further, weakness in the DX coupled with estimates of favorable industrial production data from France and Italy will support an upside in the prices. However, sharp upside in prices will be capped or reversal can be seen due to mixed market sentiments, expectations of decline in China’s industrial production data along with anticipation of slow rise in manufacturing and industrial production data from the UK. Additionally, talks for reopening of closed oil export terminals will restrict positive movement in the oil prices. In the Indian markets, Rupee appreciation will prevent sharp upside in the prices.