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Commodities Energy

Oil and natural gas daily review (December 20, 2013)

December 20, 2013, Friday, 05:06 GMT | 00:06 EST | 09:36 IST | 12:06 SGT
Contributed by Angel Broking


Crude Oil

Nymex crude oil prices gained by more than 1 percent yesterday on the back of rise in total US petroleum demand by 13 percent to 21 million barrels a day the most since April 2008, as per the US Energy Department. 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.

However, strength in the DX capped sharp upside in the prices. Oil prices touched an intra-day high of $99.17/bbl and closed at $98.80/bbl in yesterday’s trading session.

On the domestic bourses, prices rose by 3.1 percent due to Rupee depreciation and closed at Rs.6239/bbl after touching an intra-day high of Rs.6247/bbl on Thursday.


Natural Gas

Nymex natural gas prices gained sharply around 4.2 percent yesterday on the back of more than expected plunge in US natural gas inventories. Inventories will be on a declining trend till mid-March as a result of winter demand and seasonal pattern.

However, strength in the DX capped sharp gains in the prices. Gas prices touched an intra-day high of $4.471/mmbtu and closed at $4.447/mmbtu in yesterday’s trading session.

On the domestic bourses, prices rose by 3.9 percent and closed at Rs.276.2/mmbtu after touching an intra-day high of $278.30/mmbtu on Thursday.

EIA Inventories Data

US Energy Information Administration (EIA) released its weekly inventories yesterday and US natural gas inventory declined more than estimated by 285 billion cubic feet (bcf) which stood at 3.248 trillion cubic feet 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, rise in US petroleum consumption which is at the highest level since 2008 will support an upside in the prices. Additionally, estimates of rise in demand for the fuel after statement by the Federal Reserve indicated economic growth in the US will act as a positive factor. However, sharp upside in the prices will be capped on account of weak market sentiments along with strength in the DX. In the Indian markets, Rupee depreciation will support an upside in oil prices.