Commodities » Energy

Oil and natural gas daily review (March 15, 2013)

Contributed by Angel Broking

Crude Oil

Nymex crude oil prices increased by 0.6 percent taking cues from unexpected decline in US unemployment claims which led to expectations of rise in demand for the fuel coupled with weakness in the DX.

However, sharp upside in the prices was capped on the back of rise in the US crude oil inventories, increase in OPEC production along with rise in US output at highest level since July 1992. Crude oil prices touched an intra-day high of $93.25/bbl and closed at $93.03/bbl in yesterday's trading session.

On the domestic bourses, prices declined by 0.2 percent and closed at Rs.5,031/bbl after touching an intra-day low of Rs.5,011/bbl on Thursday. Depreciation in the Indian Rupee cushioned sharp fall in the prices on the MCX.


Natural Gas

Nymex natural gas prices rose by more than 4 percent yesterday on the back of more than expected decline in US natural gas inventories coupled with forecast for cooler winter weather conditions.

Weakness in the DX also acted as a positive factor for the prices. Gas prices touched an intra-day high of $3.834/mmbtu and closed at $3.831/mmbtu on Thursday.

On the domestic front, prices increased by 2.3 percent and closed at Rs.205.70/mmbtu after touching an intra-day high of Rs.206.50/mmbtu in yesterday's trading session.

EIA Inventories Data

US Energy Information Administration (EIA) released its weekly inventories yesterday and US natural gas inventory declined more than expected by 145 billion cubic feet (bcf) which stood at 1.938 trillion cubic feet for the week ending on 8th March 2012.


Outlook

From the intra-day perspective, we expect crude oil to trade higher on the back of upbeat global market sentiments, decline in unemployment claims leading to expectations of rise in demand for fuel along with weakness in the DX. Further, fall in inflation data, rise in industrial production and increase in consumer sentiments data from US will also support an upside in the prices.

In the Indian markets, appreciation in the Rupee will cushion sharp upside in the prices on the MCX.