Commodities

Oil and natural gas daily review (February 04, 2013)

Contributed by Angel Broking

Crude Oil

Nymex crude oil prices increased around 2 percent in the last week taking cues from optimistic statement from US Federal Reserve of continuing the plan of bonding buying coupled with weakness in the DX. Additionally, favorable economic data from the US and Euro region also supported an upside in the crude oil prices.

However, sharp upside in the crude prices was capped on the back of more than expected rise in the US crude oil inventories. Crude oil prices touched a weekly high of $98.24/bbl and closed at $97.77/bbl in the last trading session of the week.

On the domestic bourses, prices declined by 0.2 percent as a result of appreciation in the Indian Rupee and closed at Rs.5,182/bbl on Friday and touched a weekly low of Rs.5,140/bbl.

Natural Gas:

Nymex natural gas prices traded on a flat note but declined marginally on the back of less than expected decline in the US Natural gas inventories.

However, sharp downside in the gas prices was cushioned as a result of weakness in the DX. Gas prices touched a weekly low of $3.232/mmbtu and closed at $3.298/mmbtu in the last trading session of the week.

On the domestic front, prices declined by 1.4 percent on account of appreciation in the Indian Rupee and closed at Rs.176.40/mmbtu on Friday after touching a weekly low of Rs.173.80/mmbtu.

Outlook

In today's session, we expect crude oil prices to trade higher on signs of recovery in the global markets along with weakness in the DX. Recovery in key consuming nations might increase the demand for the fuel. In the domestic market, appreciation in the rupee is expected to restrict gains in the crude oil prices on MCX.