Commodities

Oil and natural gas daily review (February 18, 2013)

Contributed by Angel Broking

Crude Oil

Nymex crude oil prices traded on a flat note and increased marginally in the last week taking cues from statement from European Council members that the currency is not overvalued, increase in demand forecast from Organization of Petroleum Exporting Countries and US Energy Department (EIA). Additionally, United Nations inspectors unable to reach a deal with Iran created supply concerns which supported crude prices.

However, decline in European and major economies in region coupled with strength in the DX capped sharp gains in the prices. Crude oil prices touched a weekly high of $98.11/bbl and closed at $95.86/bbl in the last trading session of the week.

On the domestic bourses, prices gained by 1.1 percent on the back of depreciation in the Indian Rupee and closed at Rs.5,199/bbl and touched a weekly high of Rs.5,273/bbl on Friday.

Natural Gas

On a weekly basis, Nymex natural gas prices declined by 3.2 percent on account of less than expected decline in US natural gas inventories coupled with forecast for cooler winter weather.

Additionally, strength in the DX also exerted downside pressure on the prices. Gas prices touched a weekly low of $3.125/mmbtu and closed at $3.161/mmbtu in the last week.

On the domestic front, prices declined by 2.7 percent and closed at Rs.172/mmbtu on Friday after touching a low of Rs.169.30/mmbtu in the prior week.

Outlook

In today's session, we expect crude oil prices to trade with negative bias on the back of worries over the growth in the US as the industrial output witnessed a decline. Strength in the DX might also act as a bearish factor for the crude oil prices. Depreciation in the Indian Rupee will however, cushion fall in the prices on the MCX.