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Commodities Energy

Oil and natural gas daily review (June 26, 2014)

June 26, 2014, Thursday, 04:47 GMT | 23:47 EST | 08:17 IST | 10:47 SGT
Contributed by Angel Broking

Crude Oil

WTI crude inched higher on Wednesday on news of a U.S. government decision to permit exports of lightly refined oil, while Brent oil fell as fears of supply cuts from Iraq receded. U.S. crude reversed a two-day downward trend, after U.S. federal officials approved exports of condensate, an ultra-light oil, in a marginal relaxation of a 40-year ban on U.S. oil exports.

The rally lost some steam after weaker-than-expected data from the U.S. Energy Information Administration (EIA) pointed to a potential dip in demand growth from the world's largest oil consumer and as traders awaited some clarification of what the condensate ruling would mean for the market.

EIA inventory update

The EIA released its weekly inventories report last night at 8:00pm IST and US crude oil inventories rose by 1.7 million barrels for the week ending on 20th June 2014. Gasoline stocks rose by 0.71 million barrels whereas distillate inventories rose by 1.2 million barrels for the same time period.

Natural gas

U.S. natural gas futures edged higher on Wednesday on forecasts for stronger-than-normal air conditioning demand as the market waited for the government to report what is expected to be another bigger-than-normal storage build.

Natural gas inventories are due to be reported tonight at 8 PM tonight and gas inventories are expected to show a surplus 102 BCF as against the previous weeks build up of 113 BCF


On an intraday basis, we expect crude oil prices to trade higher as US decision to allow exports of condensate is a big move that will change the landscape of US energy industry. In addition, the Iraq situation will continue to dominate its influence in crude oil markets acting as a positive factor. However, potential dip in demand in the US in the recent inventory reports by the EIA raises concerns.

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