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Commodities Energy

Oil and natural gas daily review (June 17, 2014)

June 17, 2014, Tuesday, 06:28 GMT | 01:28 EST | 09:58 IST | 13:28 SGT
Contributed by Angel Broking


Crude Oil

Concerns over potential disruptions over oil exports from Iraq supported Brent prices while profit booking in WTI led to fall in prices. The rally lost some steam on Monday as the Iraqi government tightened security and deployed extra troops around oil infrastructure and oilfields to help protect its vital energy industry from Sunni Muslim insurgents who have gained ground over the past week.

U.S. Secretary of State John Kerry said the United States was considering air strikes to help the Iraqi government fend off the insurgency, but would not coordinate military action with Iran.

On the MCX, crude prices largely traded positive and gained marginally by 0.3 percent to close at Rs.6421/bbl

API inventory forecast

The API is scheduled to release its weekly inventories report tonight at 8:00pm IST and US crude oil inventories is expected to gain by 0.3 million barrels for the week ending on 13th June 2014.

Gasoline stocks are expected to decline by 0.3million barrels while distillate inventories are expected to decrease by 0.8 million barrels for the same time period.


Natural gas

U.S. natural gas futures ended lower on Monday as record production and predicted cooler temperatures next week offset increased air conditioning demand in the Midwest and East this week. On the MCX, natural gas prices declined by 0.8 percent and closed at Rs.284/MMBtu


Outlook

On an intraday basis, we expect crude prices to trade on a positive note as violence in Iraq has raised concerns about exports from the nation while on the other hand the API inventory due to be released tonight will provide further trajectory to prices. Any action by the US with regards to the situation in Iraq will heat the situation further in turn supporting prices.

On the MCX, crude prices are expected to trade on a positive note in line with strength in international markets.