Commodities

Oil and natural gas daily review (February 14, 2013)

Contributed by Angel Broking

Crude Oil

Nymex crude oil prices declined by 0.5 percent yesterday taking cues from Iran's statement that it was nearing the agreement with nuclear inspectors along with US Energy Department (EIA) said that US crude output rose to highest level in last 20 years. Additionally, rise in US crude oil inventories coupled with increase in US production for crude oil also exerted downside pressure on the prices. However, sharp downside in the crude oil prices was cushioned as a result of weakness in the DX. Crude oil prices touched an intra-day low of $96.63/bbl and closed at $97.01/bbl in yesterday's trading session. On the domestic bourses, prices traded on a flat note and closed at Rs.5,249/bbl after touching an intra-day high of Rs.5,273/bbl on Wednesday. Appreciation in the Indian Rupee capped sharp gains in the prices on the MCX.

EIA Inventories Data

As per the US Energy Department (EIA) report, US crude oil inventories rose less than expected by 560,000 million barrels to 372.20 million barrels for the week ending on 8th February 2013. Gasoline stocks declined by 0.8 million barrels to 233.20 million barrels and whereas distillate stockpiles fell by 3.7 million barrels to 125.90 million barrels for the last week.

News: Iran is nearing the agreement with United Nations nuclear inspectors which arrived in Iran to negotiate and access to the Persian Gulf nation's nuclear facilities. International Atomic Energy Agency (IAEA) inspectors led by Herman Nackaerts are looking for a deal that would include a visit to the Parchin military site, the place where nuclear work may have been carried out as per the intelligence reports received by the agency.

Natural Gas

EIA Inventories Forecast:

US Energy Information Administration (EIA) is scheduled to release its weekly inventories and US natural gas inventory are expected to decline by 166 billion cubic feet (bcf) for the week ending on 8th February 2013.

Outlook

In today's session, we expect crude oil prices to trade higher due to weakness in the DX along with firm global market sentiments. However, with rise in the crude oil output in US to a 20 year high along with talks amongst Iran and US are showing signs of progress is likely to cap the gains. Appreciation in the Indian Rupee will act as a bearish factor for the crude oil prices on the MCX.