Commodities

Oil and natural gas daily review (February 21, 2013)

Contributed by Angel Broking

Crude Oil

Nymex crude oil prices declined sharply around 2.3 percent yesterday on the back of more than expected rise in US crude oil inventories. Additionally, statement from the US Federal Reserve of ending its bond buying program before the expectations also exerted downside pressure on the crude oil prices.

Further, strength in the DX also acted as a negative factor for the crude prices. Oil prices touched an intra-day low of $93.92/bbl and closed at $94.46/bbl in yesterday's trading session. On the domestic bourses, prices declined by 0.9 percent and closed at Rs.5,164/bbl after touching an intra-day low of Rs.5,132/bbl on Wednesday.

API Inventories Data

As per the American Petroleum Institute (API) report last night, US crude oil inventories rose more than expected by 3.0 million barrels to 372.49 million barrels for the week ending on 15th February 2013. Gasoline inventories fell by 122,000 barrels to 232.60 million barrels and whereas distillate inventories dropped by 1.6 million barrels to 126.07 million barrels for the same week.

EIA Inventories Forecast:

The US Energy Department (EIA) is scheduled to release its weekly inventories report today at 9:30pm IST and US crude oil inventories is expected to rise by 1.8 million barrels for the week ending on 15th February 2013. Gasoline stocks are expected to fall by 0.7 million barrels whereas distillate inventories are expected to drop by 1.6 million barrels for the same period.

Natural Gas:

EIA Inventories Forecast:

US Energy Information Administration (EIA) is scheduled to release its weekly inventories and US natural gas inventory are expected to decline by 119 billion cubic feet (bcf) for the week ending on 15th February 2013.

Outlook

In today's session, we expect crude oil prices to trade lower due to worries amongst the market participation over continuation of the stimulus program offered by the US Federal Reserve. US Federal Reserve officials think that they must stop or slow the program. Strength in the DX along with expectation of rise in the US crude oil inventories might exert downside pressure on the crude oil prices. Depreciation in the Indian Rupee is likely to cushion fall in the crude oil prices on the MCX.