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Commodities Energy

Oil and natural gas daily review (January 06, 2014)

January 6, 2014, Monday, 06:39 GMT | 02:39 EST | 12:09 IST | 14:39 SGT
Contributed by Angel Broking


Crude Oil
 
Nymex crude oil prices declined around 5 percent in the last week on the back of more than expected rise in US distillate and gasoline inventories. Further, data showed that fuel demand dropped to 19 million barrels a day for the week ending on 27th December, the lowest since Oct’13 along with a fall in distillate consumption of 21 percent to 3.31 million, the biggest decline since July’03. This acted as a negative factor for crude oil.
 
Additionally, strength in the DX coupled with fall in refining activity also exerted downside pressure. Crude oil prices touched a weekly low of $93.86/bbl and closed at $95.44/bbl in the last trading session of the week.
 
On the domestic bourses, prices slipped around 5.8 percent and closed at Rs.5897/bbl on Friday after touching a low of Rs.5882/bbl on in the last week.
 
EIA Inventories Data
 
As per the US Energy Department (EIA) report, US crude oil inventories declined more than expected by 7.0 million barrels to 360.60 million barrels for the week ending on 27th December 2013. Gasoline stocks gained around 844,000 barrels to 220.70 million barrels and whereas distillate stockpiles surged sharply by 5.04 million barrels to 119.10 million barrels for the last week.
 
 
Natural Gas
 
EIA Inventories Data
 
US Energy Information Administration (EIA) released its weekly inventories yesterday and US natural gas inventory declined less than forecasted by 97 billion cubic feet (bcf) which stood at 2.974 trillion cubic feet for the week ending on 27th December 2013.
 
 
Outlook
 
While crude oil prices are expected to trade on a negative note on the back of indications of slowing demand in the US; the forecasted rise in US non-manufacturing PMI will provide some relief to prices. Positive US economic data suggests an improving economy and if released as per expectations will help the commodity recover from last week’s rout.

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