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Commodities Energy

Oil and natural gas daily review (December 24, 2013)

December 24, 2013, Tuesday, 10:30 GMT | 05:30 EST | 15:00 IST | 17:30 SGT
Contributed by Angel Broking


Crude Oil

Nymex crude oil prices declined around 0.4 percent yesterday on the back of correction seen in the prices as oil prices railed sharply in last week.

However, sharp downside in the prices was restricted due to estimates of rise in demand for the fuel from the US after IMF expected to raise growth outlook in world’s largest economy coupled with weaker DX. Additionally, tension in South Sudan rose concerns over supply from the country which exports around 220,000 barrels of oil day acting as a positive factor for the prices. Oil prices touched an intra-day low of $98.64/bbl and closed at $98.90/bbl in yesterday’s trading session.

On the domestic bourses, prices slipped around 0.6 percent due to Rupee appreciation and closed at Rs.6153/bbl after touching an intra-day low of Rs.6135/bbl on Monday.

API Inventories Forecast

The American Petroleum Institute (API) is scheduled to release its weekly inventories today and US crude oil inventories are expected to decline by 2.7 million barrels for the week ending on 20th December 2013.

Gasoline stocks are expected to gain by 1.3 million barrels and distillate inventories are expected to plunge by 0.3 million barrels for the same week.


Outlook

From the intra-day perspective, we expect crude oil prices to trade on a positive note on the back of estimates of decline in API crude oil inventories. Further, tension in South Sudan has increased the concerns of oil supply from the country which will support an upside in the prices. Additionally, upbeat market sentiments coupled with weakness in the DX will act as a positive factor. Also, forecast for favorable economic data from the US in the evening session will continue with positive movement in the oil prices. However, sharp upside in the prices will be restricted as correction can be seen after sharp rally of prices in the last week. In the Indian markets, Rupee appreciation will prevent sharp upside in the oil prices.