Commodities

Oil and natural gas daily review (February 19, 2013)

Contributed by Angel Broking

Crude Oil

International markets remained closed due to holiday in US on the occasion of President Day in yesterday's session.

MCX crude oil prices declined by 0.3 percent on the back of decline in Saudi Arabia's exports which is already in ample supply. Additionally, appreciation in the Indian Rupee also exerted downside pressure on the crude oil prices.

Oil prices touched an intra-day low of Rs. 5,172/bbl and closed at Rs.5,185/bbl in yesterday's trading session.

News:

As per the Organization of Petroleum Exporting Countries (OPEC), Saudi Arabia exports fell to 7.06 million barrels a day in December, least since September 2011. Exports declined by 1.3 percent in December when compared to the month of November. Production also dropped 4.8 percent to 9.03 million barrels a day in the month of December. The country burned around 303,000 barrels a day at power plants in December which is lowest in last 10 months and it is 29 percent less when compared to a year ago.

The OPEC report even stated that Venezuela increased its crude exports by 19 percent to 1.97 million barrels a day in December, which is at the highest level since July 2008. Nigeria also increased its shipments by 14 percent to 2.29 million barrels a day in the month of December. Even, Angola raised its exports by 5.6 percent to 1.7 million barrels a day during the same period. Kuwait's exports remained unchanged at 2.06 million, while Algeria's consignments fell by 5.5 percent to 685,000 barrels a day for the month of December.

Outlook

In today's session, we expect crude oil prices to trade lower taking cues from decline in the exports by the Saudi Arabia indicating reduced demand along with strength in the DX. Contraction in the Euro zone GDP is also expected to weigh on the prices. In the domestic market prices are expected to take cues from the international crude oil prices.