Commodities » Energy
Oil and natural gas daily review (December 16, 2013)
Nymex crude oil prices declined by more than 1 percent in the last week on the back of concerns regarding QE tapering by the Federal Reserve in its meeting starting from tomorrow. Further, estimates of rise in crude shipments by OPEC coupled with restart of export terminals in Libya exerted downside pressure on the prices.
Additionally, rise in the US refinery activity along with decline in US and API crude oil inventories during the week could not provide respite to fall in the prices. Oil prices touched a weekly low of $96.26/bbl and closed at $96.60/bbl in last trading session of the week.
On the domestic bourses, prices gained around 1 percent due to Rupee depreciation and closed at Rs.6034/bbl on Friday after touching a high of Rs.6108/bbl in the last week.
On a weekly basis, Nymex natural gas prices rose around 6.5 percent due to forecast for cooler winter weather conditions. Further, as estimated decline in US natural gas inventories supported an upside in the prices.
Additionally, weakness in the DX acted as a positive factor. Gas prices touched a weekly high of $4.443/mmbtu and closed at $4.39/mmbtu in last trading session of the week.
On the domestic front, prices gained around 7.5 percent due to Rupee depreciation and closed at Rs.272.50/mmbtu on Friday after touching a high of $276.70/mmbtu in the prior week.
From the intra-day perspective, we expect crude oil prices to trade on a negative note on the back of weak market sentiments coupled with concerns of QE tapering by the Federal Reserve. Further, OPEC estimates of increase in its oil shipments till the end of December 2013 will add downside pressure. Additionally, decline in Chinese manufacturing data will act as a negative factor. However, weakness in the DX coupled with forecast for rise in manufacturing activity of Euro Zone and the US in the evening session will cushion sharp downside or even reversal in the prices.
In the Indian markets, depreciation in the Rupee will support an upside in the prices.
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