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Commodities Energy

Oil and natural gas daily review (July 16, 2014)

July 16, 2014, Wednesday, 07:30 GMT | 02:30 EST | 11:00 IST | 13:30 SGT
Contributed by Angel Broking


Crude Oil

Oil prices continued its fall its yesterdays session following its previous day losses on rising Libyan supplies and downbeat economic data that sharpened concerns the global market was heading into a near-term glut. Selling has been accelerated in recent days as traders shift their focus from violence in Iraq and Libya to weak global fundamentals.

Still, traders remained on edge after prices tumbled by nearly 6 percent in just weeks, with fears over the militant uprising in Iraq quickly being set aside by big hedge funds who have hastily pared back record bullish long positions.

Despite ongoing fighting between militias in Tripoli, Libya's oil output has risen to 588,000 barrels per day (bpd), an increase of around 25 percent since the weekend, the acting oil minister told Reuters.

On the MCX, crude prices declined by around 0.8 percent and closed at Rs.5997/bbl

EIA inventory forecast

The EIA is scheduled to release its weekly inventories report tonight at 8:00pm IST and US crude oil inventories is expected to decline by 2.1 million barrels for the week ending on 11th July 2014. Gasoline stocks are expected to increase by 0.6 whereas distillate inventories are expected to increase by 1.8 million barrels for the same time period.


Outlook

On an intraday basis, we expect crude price to trade on a negative note continuing its recent losses as rising supplies from Libya and weak global fundamentals for crude markets will act as a negative factor. Meanwhile, the inventory report due tonight from the EIA is expected to show crude stockpiles declining cushioning downside in prices.

On the MCX, crude prices are expected to trade on a negative note taking cues from weakness in international markets.