Commodities » Energy
Oil and natural gas daily review (December 23, 2013)
Nymex crude oil prices gained around 2.8 percent in the last week 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, more than expected decline in US and API crude oil inventories supported an upside in the prices.
Additionally, statement from the Federal Reserve regarding economic growth in the US before QE tapering of $10 billion acted as a positive factor. Oil prices touched a weekly high of $99.40/bbl and closed at $99.32/bbl in last trading session of the week.
On the domestic bourses, prices rose by 2.6 percent and closed at Rs.6192/bbl on Friday after touching a high of Rs.6247/bbl in the last week.
On a weekly basis, Nymex natural gas prices gained around 0.8 percent 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 a weekly high of $4.492/mmbtu and closed at $4.425/mmbtu in last trading session of the week.
On the domestic bourses, prices rose by 1.3 percent and closed at Rs.276.1/mmbtu on Friday after touching a high of $279.30/mmbtu in the previous week.
From the intra-day perspective, we expect crude oil prices to trade on a positive note on the back of expectations of rise in demand for the fuel from the US after IMF expecting a rise in economic growth outlook in 2014. Additionally, rise in the US GDP data on Friday will support an upside in the prices. Additionally, estimates of favorable economic data from the US in the evening session will act as a positive factor. Also, upbeat market sentiments coupled with weakness in the DX will lead to positive movement in the oil prices. In the Indian markets, Rupee appreciation will cap sharp gains in the prices.
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