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Commodities Energy

Oil and natural gas daily review (February 19, 2014)

February 19, 2014, Wednesday, 10:32 GMT | 06:32 EST | 16:02 IST | 18:32 SGT
Contributed by Angel Broking


Crude Oil

Nymex crude oil prices surged by more than 2 percent in yesterday’s trade and jumped higher than $102, the highest level in four months on the back of speculation that inventories in Cushing, Oklahoma, decreased last week and as cold weather in the U.S. boosted fuel demand.

Also, weakness in the DX acted as a supportive factor. Crude oil prices touched an intra-day high of $103.25/bbl and closed at $111.1/bbl in yesterday’s trading session.

On the domestic bourses, prices gained by 1.6 percent and closed at Rs.6331/bbl after touching an intra-day high of Rs.6338/bbl on Tuesday.

API Inventories Forecast

The American Petroleum Institute (API) is scheduled to release its weekly inventories today and US crude oil inventories are expected to gain by 1.8 million barrels for the week ending on 14th February 2014.

Gasoline stocks are expected to decline by 0.9 million barrels and distillate inventories are expected to plunge by 1.8 million barrels for the same week.


Outlook

From the intra-day perspective, we expect crude oil prices to trade higher on the back of upbeat market sentiments coupled with weakness in the DX.

Further, expectations of rise in demand for the fuel after cool winter weather conditions in the US will support an upside in the prices. Additionally, forecast for decline in API distillates and gasoline inventories will act as a positive factor.

However, estimates of unfavorable economic data from the US in the evening session will prevent sharp upside or even reversal in the prices.

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