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Commodities Energy

Oil and natural gas daily review (July 23, 2014)

July 23, 2014, Wednesday, 04:44 GMT | 23:44 EST | 08:14 IST | 10:44 SGT
Contributed by Angel Broking


Crude Oil

Nymex crude prices fell by 0.2 percent yesterday and touched a low of $103.89/bbl as supplies remained unaffected by continuing violence in Iraq, Ukraine and Gaza.

However, sharp losses were cushioned as the European Union threatened tougher sanctions against Russia over the downing of Malaysian Air Flight 17. Also, continued violence in the Gaza strip acted as a positive factor for prices.

On the domestic bourses, prices declined by more than 1 percent on Tuesday and touched an intra-day low of Rs./bbl before closing at Rs.6181/bbl.

API Inventories Data

As per the American Petroleum Institute (API) report last night, US crude oil inventories declined by 5,55,000 barrels to 374.7 million barrels for the week ending on 18th July 2014. Gasoline inventories rose by 3.6 million barrels whereas distillate inventories gained by 2.5 million barrels for the same week.

EIA Inventories Forecast

The US Energy Department (EIA) is scheduled to release its weekly inventories report today at 9:00pm IST and US crude oil inventories is expected to fall by 2.8 million barrels for the week ending on 18th July 2014. Gasoline stocks are expected to gain by 1.3 million barrels whereas distillate inventories are expected to surge by 2.1 million barrels for the same period.


Outlook

On an intraday basis, we expect crude oil prices to trade on a positive note today as a twin suicide bombing at a Libyan army base led to an escalation of clashes between Islamist militants and regular forces. Also, Libyan output fell around 20 percent, thereby adding to supply woes. Further direction will be provided by US inventory data in the evening session.

On the MCX, crude prices are expected to trade on a positive note taking cues from strong international markets.