Oil and natural gas daily review (January 21, 2014)
January 21, 2014, Tuesday, 06:25 GMT | 01:25 EST | 11:55 IST | 14:25 SGT
Nymex crude oil prices gained around 0.4 percent yesterday on the back of declining trend in crude oil inventories. Further, upbeat market sentiments in later part of the trade coupled with weakness in the DX acted as a favorable factor for the prices. Also, less volatility was observed as US banks were closed yesterday on eve of Martin Luther King Day.
However, sharp upside in the prices was prevented due to decline in China’s economic and industrial growth in yesterday’s trade which led to expectations of fall in demand for the fuel. Additionally, statement from Iran which is fifth largest member of Organization of Petroleum Exporting Countries that it will voluntarily suspend its enrichment of uranium at 20 percent capped sharp gains in the prices. Crude oil prices closed at $94.40/bbl in yesterday’s trading session.
On the domestic bourses, prices gained around 0.6 percent due to Rupee depreciation and closed at Rs.5813/bbl after touching an intra-day high of Rs.5838/bbl on Monday.
From the intra-day perspective, we expect crude oil prices to trade on a mixed note on the back of Iran agreeing to suspend its enrichment of uranium at 20 percent. Further, weak industrial data in yesterday’s trade led to expectations of decline in demand for the fuel which will exert downside pressure on the prices. Additionally, strength in the DX will act as a negative factor. While, on the other hand, upbeat market sentiments along with infusion of money by People Bank of China will support an upside in the prices. Also, forecast for rise in economic sentiments data from Euro Zone will act as a positive factor.
In the Indian markets, Rupee appreciation will cap sharp upside in the prices.