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Commodities Energy

Oil and natural gas daily review (March 11, 2014)

March 11, 2014, Tuesday, 06:26 GMT | 02:26 EST | 10:56 IST | 13:26 SGT
Contributed by Angel Broking


Crude Oil

Nymex crude oil prices declined around 1.4 percent yesterday on the back of unexpected decline in Chinese exports increasing concerns over the economic growth in world’s second largest economy. Further, Libya restarting its oil production and pumped around 275,000 barrels of oil yesterday exerted downside pressure on the prices.

Further, strength in the DX along with weak industrial production data from Euro Zone acted as a negative factor. Crude oil prices touched an intra-day low of $100.85/bbl and closed at $101.12/bbl in yesterday’s trading session.

On the domestic bourses, prices dropped around 2 percent as a result of appreciation in the Rupee and closed at Rs.6178/bbl after touching an intra-day low of Rs.6156/bbl on Monday.

API Inventories Forecast

The American Petroleum Institute (API) is scheduled to release its weekly inventories today and US crude oil inventories are expected to gain by 2.2 million barrels for the week ending on 7th March 2014.

Gasoline stocks are expected to decline by 2.2 million barrels and distillate inventories are expected to plunge by 1.1 million barrels for the same week.


Outlook

From the intra-day perspective, we expect crude oil prices to trade on a mixed note on the back of expectations of rise in API crude oil inventories will exert downside pressure on the prices. Further, restart of Libyan crude oil production and producing more crude oil will act as a negative factor. Additionally, forecast for weak manufacturing and industrial production data from UK will continue with downside movement in the prices. While on the other hand, sharp downside in prices will be cushioned pr reversal can be seen due to estimates of decline in API distillate and gasoline inventories. Also, upbeat market sentiments along with weakness in the DX will act as a positive factor.

In the Indian markets, Rupee appreciation will cap sharp gains or exert downside pressure on the prices.