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Commodities Energy

Oil and natural gas daily review (March 10, 2014)

March 10, 2014, Monday, 05:41 GMT | 01:41 EST | 10:11 IST | 12:41 SGT
Contributed by Angel Broking


Crude Oil

Nymex crude oil prices traded on a flat note in the last week on the back of geopolitical tensions between Ukraine and Russia which is the world’s largest energy exporter, led to concerns of supply disruption. Additionally, favorable jobless claims data from the US which increased the expectations of rise in demand for the commodity. Also, decline in API distillate and gasoline inventories acted as a positive factor.

However, gains were wiped off due to rise in US and API crude oil inventories. Further, decline in US refinery activity along with rise in US crude oil production acted as a negative factor. Crude oil prices touched a weekly low of $100.13/bbl and closed at $102.58/bbl in the last trading session.

On the domestic bourses, prices slipped by 1 percent in the last week due to Rupee appreciation and closed at Rs.6305/bbl after touching an intra-day low of Rs.6110/bbl on Friday.


Natural Gas

Nymex natural gas prices gained around 0.4 percent last week on the back of more than expected decline in US natural gas inventories.

However, sharp upside in the prices was capped due to estimates of less cool winter weather conditions going forward. Gas prices touched a weekly high of $4.658/mmbtu and closed at $4.662/mmbtu in the last trading session.

MCX natural gas prices plunged by 1.7 percent owing to Rupee appreciation and touched a weekly low of Rs.276.5/bbl before closing at Rs.283.3/bbl on Friday.


Outlook

From the intra-day perspective, we expect crude oil prices to trade on a mixed note on the back of decline in exports of the crude oil by Chinese economy increasing concerns over economic growth for the world’s second largest economy will exert downside pressure on the prices. Further, weak market sentiments coupled with strength in the DX will act as a negative factor. While on the other hand, expectations of favorable industrial production data from Germany and France will cushion sharp downside or reversal in the prices. Mixed employment data from the US in the last week will lead to expectations of rise in demand for the fuel which will act as a positive factor.

In the Indian markets, Rupee depreciation will cushion sharp fall or support an upside in the prices.