Commodities

Oil and natural gas daily review (January 24, 2013)

Contributed by Angel Broking

Crude Oil

Nymex crude oil declined around 1 percent yesterday on the back of more than expected rise in US crude oil inventories along with rise in the Seaway pipeline capacity to 175,000 barrels from 150,000 barrels a day which runs from Cushing, Oklahoma to the Gulf Coast. Apart from that International Monetary Fund (IMF) has forecasted that Euro region will contract by 0.2 percent in 2013 from earlier estimates of rise of 0.2 percent in October 2012 which also exerted downside pressure on the crude oil prices.

However, sharp downside in the crude oil prices was cushioned as a result of weakness in the DX. Crude oil prices touched an intra-day low of $94.95/bbl and closed at $95.23/bbl in yesterday's trading session. However, weakness in the DX in most part of the trade yesterday, cushioned fall in the crude oil prices. Crude oil prices touched an intraday low of $ 94.95/bbl and closed at $ 95.23/bbl in yesterday's trading session.

On the domestic bourses, prices declined by 0.4 percent and closed at Rs.5,179/bbl after touching an intra-day low of Rs.5,170/bbl on Wednesday.

API Inventories Data

As per the American Petroleum Institute (API) report last night, US crude oil inventories rose more than expected by 3.2 million barrels to 364.05 million barrels for the week ending on 18th January 2012. Gasoline inventories declined around 1.6 million barrels to 229.61 million barrels and whereas distillate inventories gained by 1.3 million barrels to 132.07 million barrels for the same week.

EIA Inventories Forecast

The US Energy Department (EIA) is scheduled to release its weekly inventories report today at 9:30pm IST and US crude oil inventories is expected to rise by 1.8 million barrels for the week ending on 18th January 2012. Gasoline stocks are expected to gain by 1.5 million barrels whereas distillate inventories are expected to increase by 0.4 million barrels for the same period.

Outlook

In the intra-day we expect crude oil prices to trade due to weak global market sentiments along with strength in the DX. Expectation of rise in the crude oil inventories is also expected to exert downside pressure on the crude oil prices.