Commodities

Oil and natural gas daily review (February 13, 2013)

Contributed by Angel Broking

Crude Oil

Nymex crude oil prices increased around 0.5 percent yesterday taking cues from unexpected decline in US crude oil inventories along with forecast for rise in demand for the crude oil from Organization of Petroleum Exporting Countries and US Energy Department (EIA).

Additionally, weakness in the DX also supported an upside in the crude oil prices. Crude prices touched an intra-day high of $97.79/bbl and closed at $97.51/bbl in yesterday's trading session.

On the domestic bourses, prices gained by 0.4 percent and closed at Rs.5,248/bbl after touching an intra-day high of Rs./bbl on Tuesday. Appreciation in the Indian Rupee capped further gains in the oil prices on the MCX.

API Inventories Data

As per the American Petroleum Institute (API) report last night, US crude oil inventories declined unexpectedly by 2.3 million barrels to 369.53 million barrels for the week ending on 8th February 2013. Gasoline inventories fell by 810,000 barrels to 232.73 million barrels and whereas distillate inventories dropped by 1.1 million barrels to 127.71 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 rise by 2.4 million barrels for the week ending on 8th February 2013. Gasoline stocks are expected to fall by 500,000 barrels whereas distillate inventories are expected to drop by 1.75 million barrels for the same period.

News:

As per the Organization of Petroleum Exporting Countries (OPEC) it will have to provide an average of 29.8 million barrels a day in 2013 which is 100,000 a day more than its previous estimates a month ago. The cartel's output in January was at 500,000 barrels a day which was at 30.3 million.

EIA short term energy outlook report showed that average crude oil prices will be at $92.81 a barrel this year which is up by 3.7 percent from earlier prediction of $89.54/bbl in January

Outlook

In today's session, we expect crude oil prices to trade higher as OPEC raises the demand outlook along with the decline in the US crude oil inventories. Weakness in the DX also added to the gains in the crude oil prices. Appreciation in the Indian Rupee will however, cap gains in the in the crude oil prices on the MCX.