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Commodities Energy

Oil and natural gas daily review (June 18, 2014)

June 18, 2014, Wednesday, 05:46 GMT | 01:46 EST | 10:16 IST | 12:46 SGT
Contributed by Angel Broking


Crude Oil

WTI crude eased on Tuesday while Brent prices gained as fears of oil supply disruptions from Iraq offset the possibility of increased supply due to a thawing of relations between Iran and the West. Scores of Iraqis were killed on Tuesday during a battle for the provincial capital of Baquba as an uprising by Sunni insurgents continued to threaten the disintegration of Iraq. The fighting also shut the country's main oil refinery, starving parts of the country of fuel. However, Iraq's oil refineries in the south, which process most of the country's 3.3 million barrels per day of oil production, have been unaffected so far.

On the MCX, crude prices declined by 0.1 percent on account of profit booking and closed at Rs.6414/bbl.

API inventory update

The API released its weekly inventories report last night at 8:00pm IST and US crude oil inventories fell by 5.7 million barrels for the week ending on 13th June 2014. Gasoline stocks declined by 0.48 million barrels whereas distillate inventories rose by 0.53 million barrels for the same time period.

EIA inventory update

The EIA is scheduled to release its weekly inventories report tonight at 8:00pm IST and US crude oil inventories is expected to decline by 0.7million barrels for the week ending on 13th June 2014. Gasoline stocks are expected to decline by 0.1 million barrels whereas distillate inventories are expected to increase by 0.3 million barrels for the same time period.


Outlook

On an intraday basis, we expect crude prices to trade on a positive note as oil markets are flooded with reports of violence in Iraq and tensions between Russia and Ukraine. Meanwhile, oil markets will await the inventory data due to be released tonight by the EIA which is expected to show a drawdown in crude stockpiles. Also, the outcome of the Federal Reserve meeting tonight will also have impact on crude prices.

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

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