Commodities

Oil and natural gas daily review (January 15, 2013)

Contributed by Angel Broking

Crude Oil

Nymex crude oil prices rose 0.7 percent on the back of hopes of rise in the demand from the major economies as there are signs of recovery. Additionally, weakness in the DX also acted as positive factor for the crude oil prices. However, worries over the debt ceiling in the US which emerged in the later part of the day erased some of the gains.

Crude oil prices touched an intra-day high of $94.29/bbl and closed at $94.3/bbl in yesterday's session. On the domestic bourses, prices declined 0.4 percent and closed at Rs.5,101/bbl on Monday after touching a low of Rs.5,077/bbl in yesterday's session. However, sharp upside in the prices was capped as result of appreciation in the Indian Rupee.

Natural Gas

Nymex natural gas prices increased 4.20 percent on the back of cold weather in the US increasing the demand for the heating fuel. Weakness in the DX also added to the gains in the Natural Gas prices.

Natural Gas prices touched an intra-day high of $3.411/mmbtu and closed at $3.327/mmbtu on Monday.

On the domestic front, prices gained 3.96 percent taking cues from the strength in the international prices. However, sharp gains were capped due to appreciation in the Indian Rupee. Prices closed at Rs.181/mmbtu after touching a high of Rs. 186.1/mmbtu in yesterday's session.

Outlook

In the intra-day we expect crude oil prices to trade lower due to worries over the US debt ceiling which might create bearish market sentiments. However, weakness in the DX is expected to restrict downside in the prices. In the domestic markets, appreciation in the rupee is expected to exert downside pressure in the MCX Crude oil prices.