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Commodities Energy

Oil and natural gas daily review (January 01, 2014)

January 1, 2014, Wednesday, 05:18 GMT | 00:18 EST | 09:48 IST | 12:18 SGT
Contributed by Angel Broking


Crude Oil

Nymex crude oil prices declined around 0.9 percent yesterday on the back of statement from Libya’s National Oil Corporation of resuming its production from Messla oil field. Further, restart of operations in Libya’s Tobruk and Sarir refineries also exerted downside pressure on the prices. Additionally, easing of supply concerns from South Sudan coupled with strength in the DX acted as a negative factor.

However, sharp downside in prices was cushioned due to decline in API crude oil inventories. Crude oil prices touched an intra-day low of $98.15/bbl and closed at $98.40/bbl in yesterdays’ trading session.

On the domestic bourses, prices slipped around 0.6 percent and closed at Rs.6122/bbl after touching an intra-day low of Rs.6095/bbl on Tuesday.

API Inventories Data

As per the American Petroleum Institute (API) report last night, US crude oil inventories declined by 5.7 million barrels to 361.80 million barrels for the week ending on 27th December 2013.

Gasoline inventories gained by 3.3 million barrels to 222.78 million barrels and whereas distillate inventories surged by 2.6 million barrels to 117.0 million barrels for the same week.


Outlook

From the intra-day perspective, we expect crude oil prices to trade on a mixed note on the back of decline in API crude oil inventories in yesterday’s trade which will support an upside in the prices. Further, favorable consumer confidence data from the US in yesterday’s trading session will act as a positive factor. While on the other hand, restart of production in Libya will add downside pressure on the prices. Additionally, ease of supply concerns from South Sudan coupled with decline in China’s manufacturing data will act as a negative factor. Also, less volatility will be observed as majority markets are closed today on the eve of New Year’s holiday. In the Indian markets, Rupee appreciation will add downside pressure on the prices.