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Commodities Energy

Oil and natural gas daily review (July 14, 2014)

July 14, 2014, Monday, 05:27 GMT | 00:27 EST | 08:57 IST | 11:27 SGT
Contributed by Angel Broking


Crude Oil

Faltering demand for gasoline in the US, resumption of Libya’s crude output and exports and ease of geo-political tensions have been the prime factors behind recent fall in oil prices (both Brent and WTI)

Libya's state-run National Oil Corp lifted a force majeure from the major eastern Ras Lanuf and Es Sider oil ports after rebels agreed last week to end a blockade.

The two Libyan ports had been exporting about 500,000 barrels per day (bpd) of crude, far below the 1.4 million bpd that the country pumped in the second quarter of last year, before protests started.

While concerns over abrupt oil shortages from Iraq have eased since an Islamist insurgency raised the spectre of disruptions, traders remain on edge. Sunni insurgents battling forces loyal to Iraqi Prime Minister Nuri al-Maliki broke into a military base northeast of Baghdad last Thursday.

On the NYMEX, WTI Crude oil prices declined by around 2.4 percent touched a weekly low of $100.44/bbl and closed at $100.83/bbl.


Outlook

On an intraday basis, we expect crude prices to trade sideways after oil prices declined for three continuous weeks as worries about supply disruptions in the Middle East and North Africa eased.

On the other hand, the escalation of Portugal situation has raised demand concerns from the Euro area, while the restart of Libyan exports will ensure smooth supplies in energy markets.

On the MCX, crude prices are expected to trade sideways in line with sideways trade in international markets.