Commodities » Energy

Oil and natural gas daily review (March 06, 2013)

Contributed by Angel Broking

Crude Oil

Nymex crude oil prices increased around 0.8 percent yesterday taking cues from shut in the pipeline in the North Sea after a leak was discovered which created the supply concerns. Additionally, upbeat global market sentiments coupled with weakness in the DX also supported an upside in the crude oil prices.

However, sharp upside in the oil prices was capped as a result of rise in the US crude oil inventories. Crude oil prices touched an intra-day high of $90.99/bbl and closed at $90.82/bbl in yesterday's trading session.

On the domestic bourses, prices gained by 0.5 percent and closed at Rs.4,977/bbl after touching an intra-day high of Rs.4,990/bbl on Tuesday. Appreciation in the Indian Rupee prevented further gains in the prices on the MCX.

API Inventories Forecast

As per the American Petroleum Institute (API) report last night, US crude oil inventories rose by 5.6 million barrels to 378.99 million barrels for the week ending on 1st March 2013. Gasoline inventories fell by 914,000 barrels to 230.24 million barrels and whereas distillate inventories dropped by 1.7 million barrels to 122.64 million barrels for the same week.

EIA Inventories Forecast

The US Energy Department (EIA) is scheduled to release its weekly inventories report today at 9:00pm IST and US crude oil inventories is expected to rise by 0.5 million barrels for the week ending on 1st March 2013. Gasoline stocks are expected to fall by 0.7 million barrels whereas distillate inventories are expected to drop by 0.9 million barrels for the same period.


Outlook

In today's session, we expect crude oil prices to trade with positive bias due to upbeat global market sentiments, shutdown of pipeline in North Sea along with weakness in the DX. However, sharp upside in the prices will be capped on the back of expectations of rise in US crude oil inventories. In the Indian markets, appreciation in the Rupee will prevent sharp gains in the prices on the MCX.