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Commodities Energy

Oil and natural gas daily review (June 27, 2014)

June 27, 2014, Friday, 06:39 GMT | 01:39 EST | 11:09 IST | 13:39 SGT
Contributed by Angel Broking


Crude Oil

Ease of fears over exports disruptions from Iraq and assurances from United Nations Iraq Special Envoy Nickolay Mladenov that Iraq's southern oilfields, which produce most of the nation's 3.3 million barrels per day, remained unaffected, cooled oil prices on both sides of the Atlantic.

Insurgents and Iraqi government forces continued to fight on Wednesday for control of the country's largest refinery, the 300,000-barrel-per-day Baiji complex, and troops were airlifted to the site by helicopter. Oil output in Libya rose to 300,000 bpd after the El Feel field increased production, further pressuring prices.

On the MCX, crude oil prices declined by 0.7 percent and closed at 6385/bbl.


Natural gas

U.S. natural gas futures fell 3 percent on Thursday after the government reported a seventh super-sized addition to storage, pressuring the front-month contract to the lowest expiration price.

Utilities added 110 billion cubic feet of gas into storage last week, the U.S. Energy Information Administration reported. It was a record seventh straight build over 100 bcf.


Outlook

On an intraday basis, we expect crude prices to trade sideways as the situation in Iraq has eased down a bit along with the inventory buildup in the recent weeks indicate potential dip in demand from the US. In addition, oil output in Libya has been increasing in the recent weeks easing fears of supply disruption.

On the other hand, militants continue their fight in Iraq and take control over Iraq’s largest oil refinery acting as a positive factor for crude prices.

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

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