Commodities

Oil and natural gas daily review (February 01, 2013)

Contributed by Angel Broking

Crude Oil

Nymex crude oil prices declined 0.3 percent on the back of concerns that that the major economies of the world particularly US and China are observing slower growth due to unfavorable data from these nations which might reduce the demand for the crude oil. However, weakness in the DX acted as a supportive factor for the crude oil prices.

Crude oil prices touched an intra-day low of $96.84/bbl and closed at $97.7/bbl in yesterday's trading session.

On the domestic bourses, prices declined by 0.2 percent on account of appreciation in the Indian Rupee and closed at Rs.5,202/bbl after touching an intra-day low of Rs.5,173/bbl on Thursday.

Natural Gas:

Nymex natural gas prices declined around 0.1 percent on the back of less than expected decline in the US natural gas inventories. Additionally, unfavorable economic data from US also exerted downside pressure on the prices.

However, sharp downside in the natural gas prices was cushioned as a result of weakness in the DX. Gas prices touched an intra-day low of $3.243/mmbtu and closed at $3.335/mmbtu on Thursday.

On the domestic front, prices traded on a flat note and closed at Rs.178.2/mmbtu after touching an intra-day low of Rs.173.8/mmbtu in yesterday's trade.

EIA Inventories Data

US Energy Information Administration (EIA) released its weekly inventories yesterday and US natural gas inventory declined less than expected by 194 billion cubic feet (bcf) which stood at 2.802 trillion cubic feet for the week ending on 25th January 2012.

Outlook

In today's session, we expect crude oil prices to trade higher on expectation that the US added more jobs in last month. Weakness in the DX might also add to the gains. However, unfavorable data from the Chinese economy might restrict gains. In the domestic market, depreciation in the rupee is expected to act as supportive factor for the crude oil prices on MCX.