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Commodities Energy

Oil and natural gas daily review (July 15, 2014)

July 15, 2014, Tuesday, 06:33 GMT | 01:33 EST | 11:03 IST | 13:33 SGT
Contributed by Angel Broking


Crude Oil

WTI oil prices gained marginally by 0.1 percent while Brent crude oil prices declined by 1 percent as investors dump crude on receding fears of Portugal situation.

Renewed violence in Libya raises questions about the production from the nation. Meanwhile, protesters have shut down production at the eastern Libyan oil port of Brega, state firm National Oil Corp (NOC) said on Saturday. No timetable was disclosed for resuming operations at the 43,000-barrel-per-day facility. In Iraq, lawmakers struggled to break a political deadlock in forming a government to tackle the Islamist-led insurgency raging less than 50 miles (80 km) from Baghdad.

The market also kept an eye on talks in Vienna over Tehran's nuclear program. Iran's oil supplies have been restricted by sanctions for several years, but an agreement could lead to a softening, or lifting, of those limits. Negotiators have set a July 20 deadline for a deal, but diplomats say the two sides are deeply divided and assume the talks will be given another six months.


Natural Gas

U.S. natural gas futures closed nearly unchanged on Monday as forecasts for continued moderate weather and another expected large build in stockpiles calmed concerns over low inventory levels. Natural gas prices have declined steadily from $4.75 per mmBtu hit in mid-June and on Friday hit the lowest level since January, in part because inventories have grown more quickly than expected after a cold winter left low levels of gas in storage.

On the MCX, NG prices declined by 0.44 percent and closed at Rs.249/MMbtu


Outlook

On an intraday basis, crude prices is expected to trade on a sideways note as the violence in Libya and political deadlock in Iraq raises concerns on the supply side. On the contrary, markets also keep an eye on Tehran nuclear programme; if sanctions are eased the crude markets will balance of the supplies from Iran acting as a negative factor.

On the MCX, crude prices are expected to trade sideways taking cues from sideways trade in international markets.

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