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Commodities Energy

Oil and natural gas daily review (February 14, 2014)

February 14, 2014, Friday, 05:30 GMT | 00:30 EST | 10:00 IST | 13:30 SGT
Contributed by Angel Broking


Crude Oil

Nymex crude oil prices traded on a flat note and gained marginally yesterday on the back of sharp decline in inventories at Cushing, Oklahoma. Further, weakness in the DX coupled with decline in US distillate and gasoline inventories supported an upside in the prices.

While on the other hand, unfavorable economic data from the US increased worries over demand for the commodity thereby exerting downside pressure on the prices. Additionally, rise in US crude oil production along with decline in demand from the US acted as a negative factor.

On the domestic bourses, prices jumped by 0.5 percent due to Rupee depreciation and closed at Rs.6253/bbl after touching an intra-day high of Rs.6258/bbl on Thursday.


Natural Gas

Nymex natural gas prices gained around 8 percent yesterday on the back of decline in US natural gas inventories. Further, expectations of rise in demand for the commodity amid cool winter weather conditions in the US supported an upside in the prices. Additionally, weakness in the DX acted as a positive factor. Gas prices touched an intra-day high of $5.236/mmbtu and closed at $5.219/mmbtu in yesterday’s trade.

On the domestic front, prices gained by 3.3 percent and closed at Rs.318.7/mmbtu after touching an intra-day high of Rs.320.4/mmbtu on Thursday.

EIA Inventories Data

US Energy Information Administration (EIA) released its weekly inventories yesterday and US natural gas inventory declined as expected by 237 billion cubic feet (bcf) which stood at 1.686 trillion cubic feet for the week ending on 7th February 2014.


Outlook

From the intra-day perspective, we expect crude oil prices to trade on a mixed note on the back of declining trend in inventories at Cushing, Oklahoma hub which was at the highest level in last four months will support an upside in the prices. Further, weakness in the DX coupled with expectations of optimistic economic data from Euro Zone and the US in the evening session will act as a positive factor. While on the other hand, decline in oil demand and increase in the crude oil production from the US will exert downside pressure on the prices. Additionally, more than expected rise in US crude oil inventories during the week will act as a negative factor. In the Indian markets, Rupee appreciation will cap sharp gains in the prices.