Oil and natural gas daily review (February 12, 2014)
February 12, 2014, Wednesday, 05:42 GMT | 00:42 EST | 10:12 IST | 12:42 SGT
Nymex crude oil prices declined around 0.1 percent yesterday on the back of less than expected decline in API distillate and gasoline inventories. Further, increase in Libya’s output after workers resume work at Sharara field acted as a negative factor.
However, sharp downside in the prices was prevented due to weakness in the DX coupled with less than estimated rise in API crude oil inventories. Crude oil prices touched an intra-day low of $99.60/bbl and closed at $99.90/bbl in yesterday’s trading session.
On the domestic bourses, prices dropped around 0.5 percent due to Rupee appreciation and closed at Rs.6215/bbl after touching an intra-day low of Rs.6208/bbl on Tuesday.
API Inventories Data
As per the American Petroleum Institute (API) report last night, US crude oil inventories rose less than expected by 2.1 million barrels to 362.90 million barrels for the week ending on 7th February 2014. Gasoline inventories fell by 479,000 barrels to 233.50 million barrels and whereas distillate inventories declined by 1.5 million barrels to 113.40 million barrels for the same week.
EIA Inventories Forecast
The US Energy Department (EIA) is scheduled to release its weekly inventories report today at 9:00pm IST and US crude oil inventories is expected to gain by 2.7 million barrels for the week ending on 7th February 2014. Gasoline stocks are expected to fall by 0.1 million barrels whereas distillate inventories are expected to plunge by 2.3 million barrels for the same period.
From the intra-day perspective, we expect crude oil prices to trade on a mixed note on the back of expectations of decline in distillate inventories which will support an upside in the prices. Further, upbeat market sentiments coupled with weakness in the DX will act as a positive factor. Additionally, statement by US Fed Chairperson Janet Yellen that slow pace of QE tapering to be continued in future will continue with an upside movement in the prices. While on the other hand, less than forecasted fall in API distillate and gasoline inventories will exert downside pressure on the prices. Increase in Libya’s output after workers resume work at Sharara field will act as a negative factor. In the Indian markets, Rupee appreciation will cap sharp gains in the prices.