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Commodities Energy

Oil and natural gas daily review (June 24, 2014)

June 24, 2014, Tuesday, 06:34 GMT | 02:34 EST | 11:04 IST | 13:34 SGT
Contributed by Angel Broking


Crude Oil

Oil prices have rallied nearly five percent amid crisis in Iraq this month, however prices declined on Monday, its largest decline in five weeks as oil exports from Iraq remain unaffected by Islamic insurgents' who have continued to advance on Baghdad.

Iraq ships 90 percent of its crude exports from southern terminals, which are far from the Sunni insurgency. The country's oil exports in June were near record rates at around 2.53 million barrels per day. The conflict in Iraq has added about a $3 per barrel risk premium into the Brent and U.S. crude oil market.

On the MCX, crude prices declined by around 1 percent and closed at Rs.6405/bbl.

API inventory forecast

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 1.3 million barrels for the week ending on 20th June 2014. Gasoline stocks are expected to gain by 1.8 million barrels whereas distillate inventories are expected to increase by 1 million barrels for the same time period.


Natural Gas

U.S. natural gas futures dropped to the lowest price in nearly a month on Monday after revised weather forecasts for July turned cooler, raising the prospect for increased gas injections that will boost depleted gas stockpiles before next winter.

On the MCX, natural gas prices declined by more than 2 percent in line with fall in international markets and closed at Rs.267.70.


Outlook

On an intraday basis, we expect crude prices to trade sideways as Iraq issue still remains uncertain as militants take control over the refinery and advance to Baghdad. Meanwhile, the API inventories due tonight is expected to show drawdown supporting prices.

On the MCX, crude prices are expected to trade sideways in line with international markets.

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