Oil and natural gas daily review (January 30, 2014)
January 30, 2014, Thursday, 05:57 GMT | 00:57 EST | 11:27 IST | 13:57 SGT
Nymex crude oil prices declined around 0.1 percent yesterday on the back of more than expected rise in US crude oil inventories. Further, cut in stimulus measures by US Federal Reserve lead to estimates of decline in demand for the commodity acted as a negative factor.
However, sharp downside in the prices was prevented due to more than forecasted decline in distillate inventories along with weakness in the DX. Distillate demand rose by 20 percent to 4.52 million barrels a day amid cold winter weather conditions in the US. Additionally, rise in US gasoline consumption by 6.5 percent to 8.58 million barrels cushioned sharp downside in the prices. Crude oil prices touched an intra-day low of $96.32/bbl and closed at $97.40/bbl in yesterday’s trading session.
On the domestic bourses, prices traded on a flat note and fell marginally and closed at Rs.6130/bbl after touching an intra-day low of Rs.6058/bbl on Wednesday.
EIA Inventories Data
As per the US Energy Department (EIA) report, US crude oil inventories increased more than expected by 6.4 million barrels to 357.60 million barrels for the week ending on 24th January 2014. Gasoline stocks slipped by 819,000 barrels to 234.40 million barrels and whereas distillate stockpiles plunged sharply by 4.58 million barrels to 116.20 million barrels for the last week.
EIA Inventories Forecast
US Energy Information Administration (EIA) is scheduled to release its weekly inventories and US natural gas inventory are expected to decline by 225 billion cubic feet (bcf) for the week ending on 24th January 2014.
From the intra-day perspective, we expect crude oil prices to trade on a mixed note on the back of rise in US and API crude oil inventories will exert downside pressure on the prices. Further, weak market sentiments after another round of QE tapering by the Federal Reserve, forecast for unfavorable economic data from the US in the evening session along with strength in the DX will act as a negative factor. While on the other hand, cool winter weather conditions led to decline in distillate and gasoline inventories along with rise in gasoline demand will support an upside in the prices. In the Indian markets, Rupee depreciation will cushion sharp fall or support an upside in the prices.