Oil and natural gas daily review (February 04, 2014)
February 4, 2014, Tuesday, 05:20 GMT | 00:20 EST | 10:50 IST | 13:20 SGT
Nymex crude oil prices declined by more than 1 percent yesterday on the back of plunge in manufacturing data from China, UK and the US indicating concerns over demand for the fuel in near term. Manufacturing activity in the US is at the lowest level in last eight months. Further, weak market sentiments exerted downside pressure on the prices.
However, sharp downside in the prices was prevented due to weakness in the DX. Crude oil prices touched an intra-day low of $96.26/bbl and closed at $96.40/bbl in yesterday’s trading session.
On the domestic bourses, prices slipped around 1.4 percent due to Rupee appreciation and closed at Rs.6083/bbl after touching an intra-day low of Rs.6058/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 gain by 2.6 million barrels for the week ending on 31st January 2014.
Gasoline stocks are expected to gain by 1.6 million barrels and distillate inventories are expected to plunge by 2.2 million barrels for the same week.
From the intra-day perspective, we expect crude oil prices to trade lower on the back of expectations of rise in API crude oil inventories. Further, weak market sentiments coupled with strength in the DX will exert downside pressure on the prices. Additionally, decline in manufacturing data from major global economies in yesterday’s trade will act as a negative factor. Also, forecast for decline in construction data from the UK along with estimates of drop in US factory orders data in the evening session will continue with downside movement in the oil prices. In the Indian markets, Rupee depreciation will cushion sharp downside in the prices.