Commodities » Energy

Oil and natural gas daily review (March 11, 2013)

Contributed by Angel Broking

Crude Oil

Nymex crude oil prices increased around 1.4 percent in the last week taking cues from rise in risk appetite in the global market sentiments. Additionally, favorable economic data from the US and Euro zone led to expectations of rise in demand for the fuel which also supported an upside in the crude oil prices.

However, sharp upside in the prices was capped as a result of strength in the DX coupled with restart of pipeline in North Sea which was shut for five days after leak was discovered. Oil prices touched a weekly high of $92.03/bbl and closed at $91.95/bbl in the last trading session of the week.

On the domestic bourses, prices declined by 0.7 percent on account of appreciation in the Indian Rupee and closed at Rs.4,976/bbl on Friday after touching a low of Rs.4,925/bbl in the last week.

News

Saudi Arabia raised its crude production to 9.15 million barrels a day in the month of February as rise of 100,000 barrels from earlier month as per the official of the Persian Gulf who wished not to be identified as data was highly confidential.


Natural Gas

On a weekly basis, Nymex natural gas prices gained around 5 percent on the back of more than forecasted decline in the US natural gas inventories. Further, expectations of cool winter weather also acted as a positive factor for the gas prices.

However, sharp upside in the prices was capped on account of strength in the DX. Gas prices touched a high of $3.635/mmbtu in the last week and closed at $3.629/mmbtu on Friday.

On the domestic front, prices rose by 2.9 percent and closed at Rs.197.80/mmbtu on Friday after touching a high of Rs. 198/mmbtu in the last week. Appreciation in the Indian Rupee restricted sharp gains in the prices.


Outlook

For the intra-day perspective, we expect crude oil prices to trade on a negative note on the back of increase in crude oil production from Saudi Arabia. Additionally, decline in retail sales data and industrial production data from china will add downside pressure on the oil prices. However, weakness in DX coupled with upbeat in global market sentiments will cushion sharp declines in the prices. Appreciation in the Indian rupee will add downside pressure on prices on MCX platform.