New York: 23:46 || London: 04:46 || Mumbai: 08:16 || Singapore: 10:46

Commodities Energy

Oil and natural gas daily review (June 06, 2014)

June 6, 2014, Friday, 06:23 GMT | 01:23 EST | 09:53 IST | 12:23 SGT
Contributed by Angel Broking


Crude Oil

WTI and Brent oil prices declined in yesterday’s trading session in choppy trading as the Euro and dollar reacted to the rate cut by the ECB and investors anticipate growing oil demand from Europe.

Last month, political tensions pushed Brent above $111 but prices have shed about 3 percent since then. Ukraine's President-elect Petro Poroshenko said he may discuss a plan to end violence in eastern Ukraine with Russian leader Vladimir Putin.

The European Central Bank said on Thursday concerns have risen about a possible escalation of tensions between Ukraine and Russia which could affect the euro zone via trade, financial links and oil prices. The U.S. Labor Department will release its monthly jobs report, which is closely watched by financial markets around the globe.

On the MCX, crude prices declined by 0.7 percent and closed at Rs.6061/bbl.


Natural Gas

U.S. natural gas futures rebounded from a brief drop in reaction to the inventory report for last week and ended at a one-month high on Thursday in anticipation of air-conditioning demand this summer.

Utilities added a larger-than-expected 119 billion cubic feet of gas into storage last week, the largest build since 2009 and the seventh consecutive report to exceed the analysts' consensus forecast. Gas in storage now stands at 1.499 trillion cubic feet, still an 11-year low for this time of year as utilities work to refill storage depleted by a brutally cold winter.


Outlook

On an intraday basis, we expect crude prices to trade sideways with major fundamentals suggesting that incremental demand for gasoline to satisfy summer demand and driving season in the US will create demand for crude oil in turn supporting prices while ECB rate cut will lead to strength in the dollar and exert downside pressure on commodities including oil.

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