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Commodities Energy

Oil and natural gas daily review (December 19, 2013)

December 19, 2013, Thursday, 06:11 GMT | 01:11 EST | 10:41 IST | 13:11 SGT
Contributed by Angel Broking


Crude Oil

Nymex crude oil prices gained around 0.6 percent yesterday on the back of more than expected decline in US crude oil inventories. Further, expectations of rise in demand for the fuel after statement from the US Federal Reserve indicated an economic growth in the country acted as positive factor.

Additionally, decline in refinery activity by 1.1 percent to 91.5 percent acted as a supportive factor for the prices. Oil prices touched an intra-day high of $98.01/bbl and closed at $97.80/bbl in yesterday’s trading session.

On the domestic bourses, prices rose by 0.8 percent due to Rupee depreciation and closed at Rs.6049/bbl after touching an intra-day high of $6069/bbl on Wednesday.

EIA Inventories Data

As per the US Energy Department (EIA) report, US crude oil inventories declined more than expected by 2.94 million barrels to 372.30 million barrels for the week ending on 13th December 2013.

Gasoline stocks gained around 1.34 million barrels to 220.50 million barrels and whereas distillate stockpiles plunged by 2.11 million barrels to 116.0 million barrels for the last week.


Natural Gas

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 260 billion cubic feet (bcf) for the week ending on 13th December 2013.


Outlook

From the intra-day perspective, we expect crude oil prices to trade on a positive note on the back of decline in US and API crude oil inventories during the week. Further, decline in US refinery activity coupled with estimates of rise in demand for the fuel after statement from the US Federal Reserve indicating economic growth will support an upside in the prices. Additionally, upbeat market sentiments, forecast for favorable economic data from the Euro Zone and UK along with weakness the DX will act as a positive factor. However, sharp upside in the prices will be capped or reversal can be seen on account of mixed economic data from the US in the evening session.