Commodities

Oil and natural gas daily review (February 27, 2013)

Contributed by Angel Broking

Crude Oil

Nymex crude oil prices declined by 0.5 percent yesterday taking cues from rise in the US crude oil inventories coupled with strength in the DX.

However, sharp downside in the prices was cushioned as a result of favorable economic data from US coupled with positive statement from US Fed Chairman Ben Bernanke of supporting the US Federal Reserve decision of bond buying program. Crude oil prices touched an intra-day low of $91.92/bbl and closed at $92.60/bbl in yesterday's trading session.

On the domestic bourses, prices declined by 0.5 percent and closed at Rs.5,028/bbl after touching an intra-day low of Rs.5,002/bbl on Tuesday. Depreciation in the Indian Rupee prevented sharp fall in the prices on the MCX.

API Inventories Data

As per the American Petroleum Institute (API) report last night, US crude oil inventories rose by 904,000 barrels to 373.39 million barrels for the week ending on 22nd February 2013. Gasoline inventories fell by 1.4 million barrels to 231.60 million barrels and whereas distillate inventories dropped by 1.7 million barrels to 124.33 million barrels for the same week.

EIA Inventories Forecast

The US Energy Department (EIA) is scheduled to release its weekly inventories report today at 9:00pm IST and US crude oil inventories is expected to rise by 2.4 million barrels for the week ending on 22nd February 2013. Gasoline stocks are expected to fall by 0.9 million barrels whereas distillate inventories are expected to drop by 1.4 million barrels for the same period.

Outlook

In today's session, we expect crude oil prices to trade with positive bias due to favorable economic data from US coupled with weakness in the DX. Additionally, optimistic statement from US Fed Chairman Ben Bernanke will also support an upside in the prices. Sharp upside in the prices will be capped on account of expectations of rise in US crude oil inventories. In the Indian markets, appreciation in the Rupee will prevent upside in the prices on the MCX.