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Commodities Energy

Oil and natural gas daily review (January 02, 2014)

January 2, 2014, Thursday, 07:13 GMT | 02:13 EST | 11:43 IST | 14:13 SGT
Contributed by Angel Broking


Crude Oil

Nymex crude oil prices gained around 0.2 percent yesterday on the back of more than expected decline in API crude oil inventories. Further, expectations of rise in the US refinery activity supported an upside in the prices.

However, sharp upside in prices was capped due to decline in China’s manufacturing data. Additionally, restart of oil production in Libya along with ease of supply concerns from South Sudan restricted positive movement in the prices. Crude oil prices touched an intra-day high of $98.60/bbl and closed at same levels in yesterdays’ trading session.

On the domestic bourses, prices rose around 0.2 percent due to Rupee depreciation and closed at Rs.6135/bbl after touching an intra-day high of Rs.6170/bbl on Wednesday.

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 positive note on the back of decline in API crude oil inventories. Further, expectations of favorable manufacturing data from the Euro Zone will support an upside in the prices. Additionally, weakness in the DX coupled with upbeat market sentiments will act as a positive factor. However, in the later part of the trade sharp upside in the prices can be capped or reversal can be seen due to forecast for decline in US manufacturing data in the evening session. Also, estimates of decline in UK’s manufacturing data and mixed manufacturing data from China will act as a negative factor. In the Indian markets, Rupee appreciation will prevent positive movement in the prices.