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Commodities Energy

Oil and natural gas daily review (December 31, 2013)

December 31, 2013, Tuesday, 05:37 GMT | 00:37 EST | 10:07 IST | 12:37 SGT
Contributed by Angel Broking


Crude Oil

Nymex crude oil prices declined around 1 percent yesterday on the back of statement from Libya’s National Oil Corporation of resuming its production from Messla oil field. Further, restart of operations in Libya’s Tobruk and Sarir refineries also exerted downside pressure on the prices. Additionally, less than expected rise in US pending home sales data acted as a negative factor.

However, sharp downside in prices was cushioned due to weakness in the DX. Crude oil prices touched an intra-day low of $99.13/bbl and closed at $99.29/bbl in yesterdays’ trading session.

On the domestic bourses, prices slipped around 1.6 percent and closed at Rs.6158/bbl after touching an intra-day low of Rs.6152/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 3.0 million barrels for the week ending on 27th December 2013.

Gasoline stocks are expected to gain by 1.7 million barrels and distillate inventories are expected to surge by 1.2 million barrels for the same week.


Outlook

From the intra-day perspective, we expect crude oil prices to trade on a mixed note on the back of expectations of decline in API crude oil inventories will support an upside in the prices. Further, upbeat market sentiments coupled with weakness in the DX will act as a positive factor. Additionally, expectations of positive economic data from the US in the evening session will continue with positive movement in the oil prices. While on the other hand, restart of production in Libya will add downside pressure on the prices. Also, less volatility will be observed as majority markets are closed or will have early closing session. In the Indian markets, Rupee appreciation will cap gains in the prices.