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Commodities Energy

Oil and natural gas daily review (February 18, 2014)

February 18, 2014, Tuesday, 05:34 GMT | 00:34 EST | 10:04 IST | 12:34 SGT
Contributed by Angel Broking


Crude Oil

Nymex crude oil prices traded on a flat note and gained marginally in yesterday’s trade on the back of signs of improvement in US economy. Further, rise in record new credit policy of China bolstered the demand outlook from the world’s two biggest oil consumers. Additionally, weakness in the DX acted as a positive factor.

However, less volatility was observed as US markets were closed yesterday on the eve of Presidents' Day. Crude oil prices touched an intra-day high of $101.13/bbl and closed at $100.3/bbl in yesterday’s trading session.

On the domestic bourses, prices gained by 0.5 percent and closed at Rs.6231/bbl after touching an intra-day high of Rs.6257/bbl on Monday.

Natural Gas

Nymex natural gas prices increased by 4.8 percent yesterday on the back of snow storm across the US Midwest headed for the Northeast and Mid-Atlantic states thereby boosting the demand for the commodity and gas stockpiles are at seasonal low in last ten years.

However, less volatility was observed as US markets were closed yesterday on the observance of Presidents' Day. Gas prices touched an intra-day high of $5.47/mmbtu and closed at $5.451/mmbtu in yesterday’s trade.

On the domestic front, prices gained around 4 percent and closed at Rs.337.20/mmbtu after touching an intra-day high of $338.80/mmbtu on Monday. Rupee appreciation capped sharp gains in the prices on the MCX.


Outlook

From the intra-day perspective, we expect crude oil prices to trade higher on the back of weakness in the DX. Further, expectations of rise in demand for the fuel after signs of improvement in the US economy along with rise in record new credit policy from China will support an upside in the prices. Additionally, forecast for optimistic economic sentiments data from the Euro Zone will act as a positive factor. However, sharp upside in the prices will be capped due to mixed market sentiments. Additionally, estimates of unfavorable economic data from the US in the evening session will prevent sharp upside or even reversal in the prices. In the Indian markets, Rupee has depreciated sharply which will support an upside in the prices.