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Commodities Energy

Oil and natural gas daily review (February 17, 2014)

February 17, 2014, Monday, 05:02 GMT | 00:02 EST | 10:32 IST | 13:02 SGT
Contributed by Angel Broking


Crude Oil

Nymex crude oil prices gained around 0.4 in the last week 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.

However, unfavorable economic data from the US increased worries over demand for the commodity thereby capping sharp gains in the prices. Additionally, rise in US crude oil production, decline in demand from the US along with restart of production from Libya prevented sharp positive movement in the oil prices.

On the domestic bourses, prices jumped by 0.6 percent and closed at Rs.6253/bbl after touching an intra-day high of Rs.6258/bbl on Thursday. Rupee appreciation capped sharp gains in the prices on the MCX.


Natural Gas

On a weekly basis Nymex natural gas prices gained around 9 percent 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 a weekly high of $5.389/mmbtu and closed at $5.20/mmbtu in last trade of the week.

On the domestic front, prices gained by 8.1 percent and closed at Rs.324.40/mmbtu on Friday after touching a weekly high of Rs.333.90/mmbtu. Rupee appreciation capped sharp gains in the prices on the MCX.


Outlook

From the intra-day perspective, we expect crude oil prices to trade on a positive note on the back of declining trend in inventories at Cushing, Oklahoma hub which was at the highest level in last four months. Further, upbeat market sentiments coupled with weakness in the DX will act as a positive factor. Additionally, expectations of rise in demand for the fuel after rise in the Euro Zone GDP data will support an upside in the prices. However, less volatility will be observed as US markets closed today on the observance of Presidents' Day.

In the Indian markets, Rupee appreciation will cap sharp gains in the prices.

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