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Commodities Energy

Oil and natural gas daily review (June 09, 2014)

June 9, 2014, Monday, 12:04 GMT | 07:04 EST | 15:34 IST | 18:04 SGT
Contributed by Angel Broking


Crude Oil

Strength in the dollar index and rising OPEC production lead to fall in both brent and WTI oil prices in the last week. Prices traded lower on ample supply in the US and ease of tensions in Ukraine.

Ukraine's President-elect and western leaders are working on a peace plan to end violence in the east of the country.

Although the inventories report released last week showed a drawdown, the stocks remain near the top of the typical range for this time of year.

On the MCX, crude prices declined by 0.8 percent last week and closed at Rs.6057/bbl.


Natural Gas

U.S. natural gas futures traded within a few cents of unchanged on Friday on moderate to slightly above normal temperature forecasts and another bigger than expected storage build adding a bit to severely depleted gas stocks.

Utilities added a larger-than-expected 119 billion cubic feet of gas into storage last week, the U.S. Energy Information Administration last Thursday, the largest build since 2009 and the seventh consecutive report to exceed the five-year norm.


Outlook

On an intraday basis, we expect crude prices to trade sideways to positive 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.

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