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Commodities Energy

Oil and natural gas daily review (July 03, 2014)

July 3, 2014, Thursday, 04:40 GMT | 23:40 EST | 08:10 IST | 10:40 SGT
Contributed by Angel Broking

Crude Oil

Encouraging signs of supply from Iraq and Libya has reinforced the view that supply in the oil markets is ample in turn oil prices corrected by around 0.6 percent and closed at $104.5/bbl. Oil prices traded around the lowest notch in the last three weeks despite a big draw in U.S. oil inventories.

Libyan export capacity looked likely to recover by about 500,000 barrels per day as rebels blockading eastern oil ports have agreed to reopen the remaining two terminals at Es Sider and Ras Lanuf.

On the MCX, crude prices declined by 1 percent in line with weakness in international markets and closed at Rs.6238/bbl

EIA inventory update

The EIA released its weekly inventories report last night at 8:00pm IST and US crude oil inventories declined by 3.2 million barrels for the week ending on 27th June 2014. Gasoline stocks fell by 1.2 million barrels whereas distillate inventories rose 1 million barrels for the same time period.

Natural gas

U.S. natural gas futures lost about 2 percent on Wednesday on expectations for another big storage build and weather forecasts calling for heat in the East and West to end. After a record seven consecutive triple-digit injections, analysts forecast utilities added about 100 billion cubic feet of gas to storage last week.

On the MCX, natural gas prices declined by around 3 percent and closed at Rs.260.8/Mmbtu.


On an intraday basis, we expect crude oil prices to trade lower on profit booking at higher levels and no supply disturbance coming out of Iraq or Libya. Besides, the geo-political tensions has also eased down a bit leading to correction in oil prices as oil market realizes that further direction would be decided by the non-farm payrolls data and host of data sets to be released from the US.

On the MCX, crude oil prices are expected to trade on a lower note in line with weakness in international markets.