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Commodities » Energy

Oil and natural gas daily review (July 28, 2014)

July 28, 2014, Monday, 05:12 GMT | 00:12 EST | 09:42 IST | 12:12 SGT
Contributed by Angel Broking


Crude Oil

Nymex crude prices fell by 1 percent last week as supplies remained unaffected amidst continuing violence in Iraq, Ukraine and Gaza. Further, unseasonably weak demand and plentiful supplies of crude and refined products exerted downside pressure on prices. In addition, the International Monetary Fund chopped its 2014 forecast for global economic growth to take into account weakness early in the year in the United States and China, the world's two biggest oil consumers, thereby acting as a negative factor.

However, EU Energy Commissioner Guenther Oettinger that the European Union should not give Russia technical help to develop Arctic oil and gas fields if Moscow fails to help to defuse the Ukraine crisis as the European Union threatened tougher sanctions against Russia over the downing of Malaysian Air Flight 17.

On the domestic bourses, prices fell by 1 percent in the last week taking cues from International markets.


Natural gas

U.S. natural gas futures plunged more than 4 percent last week and fell to an eight-month low, as mild weather cut into demand for air conditioning. Also, expanding natural gas production which is likely to reach an all-time high this year also exerted downside pressure on prices.


Outlook

On an intraday basis, we expect crude oil prices to trade sideways as tensions persist in the Middle East and Ukraine. While on the other hand, negative pending home sales data from the US may signal slowing growth in the U.S will act as a negative factor for prices.

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