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Commodities Energy

Oil and natural gas daily review (January 29, 2014)

January 29, 2014, Wednesday, 05:36 GMT | 00:36 EST | 10:06 IST | 12:36 SGT
Contributed by Angel Broking


Crude Oil
 
Nymex crude oil prices increased around 1.8 percent yesterday on the back of expectations of rise in demand for the fuel after favorable consumer confidence data from the US coupled with cool winter weather conditions. Further, decline in API distillate inventories also supported an upside in the prices.
 
However, rise in API crude oil and gasoline inventories along with strength in the DX could not pull downside in the oil prices. Crude oil prices touched an intra-day high of $97.66/bbl and closed at $97.41/bbl in yesterday’s trading session.
 
On the domestic bourses, prices gained around 0.7 percent and closed at Rs.6133/bbl after touching an intra-day high of Rs.6154/bbl on Tuesday. Sharp upside in the prices was prevented due to appreciation in the Rupee.
 
API Inventories Data
 
As per the American Petroleum Institute (API) report last night, US crude oil inventories rose more than expected by 4.7 million barrels to 360.40 million barrels for the week ending on 24th January 2014. Gasoline inventories rose by 363,000 barrels to 235.18 million barrels and whereas distillate inventories declined by 1.8 million barrels to 116.40 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 gain by 2.3 million barrels for the week ending on 24th January 2013. Gasoline stocks are expected to gain by 1.1 million barrels whereas distillate inventories are expected to plunge by 2.2 million barrels for the same period.
 
 
Outlook
 
From the intra-day perspective, we expect crude oil prices to trade on a mixed note on the back of expectations of rise in demand for the fuel after favorable consumer confidence data from the US in yesterday’s trade. Further, cool winter weather conditions coupled with decline in distillate inventories from API and estimates of fall in US distillate inventories will also support an upside in the prices. While on the other hand, expectations of rise is US crude oil inventories along with increase in API inventories yesterday will exert downside pressure on the prices. Also, investors will remain cautious ahead of the Federal Reserve meeting today which will act as a negative factor. In the Indian markets, Rupee appreciation will cap sharp gains or even reversal in the prices.