Commodities

Oil and natural gas daily review (February 15, 2013)

Contributed by Angel Broking

Crude Oil

Nymex crude oil prices increased by 0.3 percent yesterday on the back of United Nations inspectors unable to reach a deal with Iran coupled with US unemployment claims coming on a favorable note.

However, sharp upside in the crude oil prices was capped as a result of strength in the DX. Crude oil prices touched an intra-day high of $97.71/bbl and closed at $97.31/bbl in yesterday's trading session.

On the domestic bourses, prices gained by 0.1 percent on account of depreciation in the Indian Rupee and closed at Rs.5,255/bbl after touching an intra-day high of Rs.5,268/bbl on Thursday.

Natural Gas

EIA Inventories Data

US Energy Information Administration (EIA) released its weekly inventories yesterday and US natural gas inventory declined less than expected by 157 billion cubic feet (bcf) which stood at 2.527 trillion cubic feet for the week ending on 8th February 2012.

Nymex natural gas prices declined by 3.7 percent on the back of less than expected decline in US natural gas inventories coupled with strength in the DX.

Additionally, forecast for less cool winter weather also acted as a negative factor for the prices. Gas prices touched an intra-day low of 3.135/mmbtu and closed at $3.17/mmbtu on Thursday.

On the domestic front, prices fell by 4.8 percent and closed at Rs.170.3/mmbtu after touching an intra-day low of Rs.169.80/mmbtu in yesterday's trade. Depreciation in the Indian Rupee cushioned further fall in the prices.

Outlook

In today's session, we expect crude oil prices to trade higher on expectation that OPEC might cut the crude shipments this month along with weakness in the DX. There are also indications of rise in the open interest for the US benchmark grade which rose to record highs. This might also initiate buying by the market participants. Depreciation in the Indian Rupee will support an upside in the crude oil prices on the MCX.