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Commodities Energy

Oil and natural gas daily review (June 19, 2014)

June 19, 2014, Thursday, 05:43 GMT | 00:43 EST | 09:13 IST | 11:43 SGT
Contributed by Angel Broking


Crude Oil

WTI crude oil prices dipped on Wednesday EIA numbers showed domestic crude inventories fell much less than an industry group had reported. While Brent crude rose and traded above $114 mark and rose to nine month high as Sunni militants opposing Baghdad's Shi'ite government battled their way into Iraq's largest refinery, raising concerns of supply disruptions from OPEC's second-largest producer.

On the MCX, crude prices declined by 0.6 percent and closed at Rs.6378/bbl.

EIA inventory update

The EIA released its weekly inventories report last night at 8:00pm IST and US crude oil inventories fell by 0.579 million barrels for the week ending on 13th June 2014. Gasoline stocks rose by 0.78 million barrels whereas distillate inventories rose by 0.43 million barrels for the same time period.


Natural Gas

U.S. natural gas futures eased 1 percent on Wednesday, on estimates for another bigger-than-normal storage build report on Thursday. MDA Weather Services forecast above-normal temperatures will persist in the U.S. Midwest over the next five days before cooler weather returns over the next six to 10 days. On the MCX, NG prices declined by more than 1.5 percent in line with weakness in international market.


Outlook

On an intraday basis, we expect crude prices to trade on a positive note on escalation of violence in Iraq which has created a supply constraint in oil markets. On the other hand, less than expected withdrawal of crude inventories raises concerns on the demand side in the US, although the driving season has kick-started creating incremental demand for gasoline.

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