Commodities

Oil and natural gas daily review (February 11, 2013)

Contributed by Angel Broking

Crude Oil

Nymex crude oil prices declined by more than 2 percent in the last week taking cues from negative statement from the European Central Bank President Mario Draghi, decline in demand for petroleum along with strength in the DX.

However, sharp downside in the crude oil prices were cushioned on the back of less than expected rise in US crude oil inventories. Crude oil prices touched a weekly low of $95.04/bbl and closed at $95.72/bbl in the last trading session of the week.

On the domestic bourses, prices declined by 0.7 percent and closed at Rs.5,144/bbl on Friday after touching a low of Rs.5,070/bbl in the last week. Depreciation in the Indian Rupee prevented further fall in the crude oil prices.

Natural Gas

On a weekly basis, Nymex natural gas prices declined around 1 percent on the back of less than expected decline in US natural gas inventories coupled with strength in the DX.

However, sharp downside in the prices was prevented on account of forecast for cooler winter weather ahead. Gas prices touched a low of $3.256/mmbtu in the last week and closed at $3.266/mmbtu in the last trading session of the week.

In the Indian markets, prices gained around 0.2 percent as a result of depreciation in the Indian Rupee and closed at Rs.176.80/mmbtu after touching a weekly low of Rs.174.7/mmbtu.

Outlook

In today's session, we expect crude oil prices to trade with a positive bias taking firm global market sentiments along with weakness in the DX. ECB President dovish comments in the last week that the downside risks to the euro region persist might also restrict the gains as demand is likely to witness a decline owing to strength in the DX. Depreciation in the Indian Rupee will support an upside in the crude oil prices on the MCX.