Commodities

Oil and natural gas daily review (January 31, 2013)

Contributed by Angel Broking

Crude Oil

Nymex crude oil prices increased around 0.4 percent yesterday on the back of statement from the US Federal Reserve that it will continue with its bond buying plan along with weakness in the DX.

However, sharp upside in the prices was capped as a result of decline in US GDP data coupled with more than expected rise in US crude oil inventories. Crude oil prices touched an intra-day high of $98.24/bbl and closed at $97.94/bbl in yesterday's trading session.

On the domestic bourses, prices declined by 0.3 percent on account of appreciation in the Indian Rupee and closed at Rs.5,210/bbl after touching an intra-day low of Rs.5,192/bbl on Wednesday.

EIA Inventories Data

As per the US Energy Department (EIA) report, US crude oil inventories rose more than expected by 5.9 million barrels to 369.10 million barrels for the week ending on 25th January 2012. Gasoline stocks declined by 1.0 million barrels to 232.30 million barrels and whereas distillate stockpiles fell by 2.3 million barrels to 130.60 million barrels for the last week.

Natural Gas:

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 198 billion cubic feet (bcf) for the week ending on 25th January 2012.

Outlook

In today's session, we expect crude oil prices to trade higher on as US Federal Reserve extends its bond buying program till some more time. This is likely to spur growth in the economy resulting in increase in the demand for the oil. However strength in the DX along with more than expected contraction in US GDP might cap gains in the crude oil prices today. Rise in the crude oil supplies might also restrict gains in the crude oil prices. In the domestic market, appreciation in the rupee is expected to restrict gains in the crude oil prices on MCX.