Oil and natural gas daily review (February 03, 2014)
February 3, 2014, Monday, 05:08 GMT | 01:08 EST | 10:38 IST | 13:08 SGT
Nymex crude oil prices gained around 1 percent in the last week on the back of expectations of rise in demand for the fuel after US GDP grew as estimated in Q4 of 2013. Further, increase in distillate and gasoline demand during the week supported an upside in the prices.
However, sharp upside in the prices was prevented due to QE tapering by the Federal Reserve. Additionally, strength in the DX capped sharp gains in the prices. Crude oil prices touched a weekly high of $98.59/bbl and closed at $97.50/bbl in last trading session of the week.
On the domestic bourses, prices increased by 1 percent due to Rupee depreciation and closed at Rs.6169/bbl on Friday after touching a high of Rs.6199/bbl in the last week.
On a weekly basis, Nymex natural gas prices declined around 5.8 percent on the back of estimates of mild winter weather conditions during the coming weeks in US which will lead to decline in demand for the commodity. Further, strength in the DX also acted as a negative factor.
Additionally, decline in US natural gas inventories failed to provide respite to fall in the prices. Gas prices touched a weekly low of $4.69/mmbtu and closed at $4.881/mmbtu in last trade of the week.
On the domestic front, prices slipped around 5 percent and closed at Rs.302.60/mmbtu on Friday after touching a weekly low of Rs.294.4/mmbtu. Rupee depreciation prevented sharp fall in the prices.
From the intra-day perspective, we expect crude oil prices to trade on a negative note on the back of weak market sentiments after another round of QE tapering by the Federal Reserve. Further, strength in the DX will act as a negative factor. Additionally, decline in China’s manufacturing and non-manufacturing data led to expectations of decline in demand for the fuel. Also, forecast for decline in manufacturing data from the US in the evening session will continue with downside pressure on the prices. In the Indian markets, Rupee depreciation will cushion sharp downside movement in the prices.