Commodities

Oil and natural gas daily review (January 16, 2013)

Contributed by Angel Broking

Crude Oil

Nymex crude oil prices declined around 1.1 percent yesterday taking cues from statement from US President Barack Obama that he won't negotiate with the Republican Party over the government debt ceiling and will discuss separately for cut in the spending.

Additionally, rise in the US crude oil inventories and strength in the DX also exerted downside pressure on the prices. Crude oil prices touched an intra-day low of $93.22/bbl and closed at $93.40/bbl in yesterday's trading session.

On the domestic bourses, prices gained by 0.6 percent on account of depreciation in the Indian Rupee and closed at Rs.5,131/bbl after touching an intra-day high of Rs.5,148/bbl on Tuesday.

API Inventories Data

As per the American Petroleum Institute (API) report last night, US crude oil inventories rose marginally by 46,000 barrels to 360.90 million barrels for the week ending on 11th January 2012. Gasoline inventories rose around 4.1 million barrels to 231.18 million barrels and whereas distillate inventories decline by 568,000 barrels to 130.80 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 rise by 2.3 million barrels for the week ending on 11th January 2012. Gasoline stocks are expected to gain by 2.9 million barrels whereas distillate inventories are expected to increase by 1.9 million barrels for the same period.

Outlook

In the intra-day, we expect crude oil prices to trade lower due to worries over the US debt ceiling along with strength in the DX. Rise in the crude oil inventories is also expected to exert downside pressure on the crude oil prices. In the domestic markets, depreciation in the rupee is expected to cushion fall in the MCX Crude oil prices.