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Commodities Energy

Oil and natural gas daily review (December 11, 2013)

December 11, 2013, Wednesday, 04:57 GMT | 23:57 EST | 09:27 IST | 11:57 SGT
Contributed by Angel Broking


Crude Oil

Nymex crude oil prices gained around 1.2 percent yesterday on the back of more than expected decline in API crude oil inventories. Further, increase in refinery utilization rates, rise in weekly petroleum consumption of the US along with fall in Organization of Petroleum Exporting Countries (OPEC) output supported an upside in the prices. Additionally, weakness in the DX acted as a positive factor. Oil prices touched an intra-day high of $98.74/bbl and closed at $98.51/bbl in yesterday’s trading session.

On the domestic bourses, prices rose by 1 percent and closed at Rs.6011/bbl after touching an intra-day high of Rs.6049/bbl on Tuesday. Rupee appreciation capped sharp gains in the prices on the MCX.

API Inventories Data

As per the American Petroleum Institute (API) report last night, US crude oil inventories declined sharply by 7.5 million barrels to 370.30 million barrels for the week ending on 6th December 2013. Gasoline inventories shoot up by 6.3 million barrels to 222.48 million barrels and whereas distillate inventories rose by 1.2 million barrels to 115.50 million barrels for the same week.

EIA Inventories Forecast

The US Energy Department (EIA) is scheduled to release its weekly inventories report today at 9:00pm IST and US crude oil inventories is expected to fall by 3.0 million barrels for the week ending on 6th December 2013. Gasoline stocks are expected to gain by 1.8 million barrels whereas distillate inventories are expected to surge by 0.9 million barrels for the same period.


Outlook

From the intra-day perspective, we expect crude oil prices to trade higher on the back of forecast for decline in US crude oil inventories along with fall in API crude oil inventories in yesterday’s trade. Further, increase in refinery utilization rates and rise in weekly fuel consumption of the US will support an upside in the prices. Additionally, decline in OPEC output at the lowest level since May 2011 will act as a positive factor. However, sharp upside will be capped due to weak market sentiments coupled with strength in the DX. In the Indian markets, Rupee depreciation will support an upside in the prices.