Oil and natural gas daily review (January 15, 2014)
January 15, 2014, Wednesday, 06:12 GMT | 01:12 EST | 10:42 IST | 13:12 SGT
Nymex crude oil prices increased around 0.9 percent yesterday on the back of more than expected decline in API crude oil inventories. Further, expectations of rise in demand for the fuel after favorable retail sales data from the US supported an upside in the prices.
However, sharp upside in the prices was restricted due to restart of production from Sharara in Libya after protestors agreed to postpone their action for two weeks. Additionally, strength in the DX prevented upside movement in the prices. Crude oil prices touched an intra-day high of $92.88/bbl and closed at $92.64/bbl in yesterday’s trading session.
On the domestic bourses, prices gained by 0.8 percent and closed at Rs.5701/bbl after touching an intra-day high of Rs.5714/bbl on Tuesday. Rupee appreciation capped sharp gains in prices on the MCX.
API Inventories Data
As per the American Petroleum Institute (API) report last night, US crude oil inventories declined more than expected by 4.1 million barrels to 350.40 million barrels for the week ending on 10th January 2014. Gasoline inventories rose by 5.4 million barrels to 233.78 million barrels and whereas distillate inventories declined by 1.7 million barrels to 120.50 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 fall by 0.6 million barrels for the week ending on 10th January 2013. Gasoline stocks are expected to gain by 2.5 million barrels whereas distillate inventories are expected to surge by 1.5 million barrels for the same period.
From the intra-day perspective, we expect crude oil prices to trade on a mixed note on the back of forecast for decline in US crude oil inventories will support an upside in the prices. Further, fall in API crude oil inventories in yesterday’s trade, favorable economic data from the US showing signs of economic growth along with upbeat market sentiments after World Bank raised the global growth outlook will act as a positive factor. While on the other hand, restart of oil production in Libya after protestors agreeing to delay their action will exert downside pressure on the prices. Additionally, strength in the DX will act as a negative factor. In the Indian markets, Rupee appreciation will continue with downside movement in the prices.