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Commodities Energy

Oil and natural gas daily review (March 19, 2014)

March 19, 2014, Wednesday, 05:57 GMT | 01:57 EST | 10:27 IST | 12:57 SGT
Contributed by Angel Broking


Crude Oil

WTI oil prices gained by 1.7 percent in yesterday's trade, following strong gains in equities, outweighing supplies of another buildup, while Brent prices were propped up by escalating tensions in the Crimean peninsula.

However, later in the US session markets took confidence from comments by the Russian president Vladimir Putin that he would not seize other regions outside Crimea.

Domestic markets took cues from the gains in international markets as crude prices on the MCX gained by 1.7 percent and closed at Rs.6077/bbl on Tuesday.

API Inventories Data update

The American Petroleum Institute (API) released its weekly inventories last night and US crude oil inventories rose by 5.9 million barrels to 372.9 million barrels for the week ending on 14th March 2014. Crude stocks at the Cushing, Oklahoma, and delivery hub fell by 1 million barrels. Gasoline stocks Gasoline stocks fell by 1.4 million barrels and distillate inventories fell by 674,000 barrels for the same week.

EIA Inventories Forecast

The US Energy Department (EIA) is scheduled to release its weekly inventories report today at 8:00pm IST and US crude oil inventories is expected to gain by 2.6 million barrels for the week ending on 14th March 2014. Gasoline stocks are expected to fall by 1.5 million barrels whereas distillate inventories are expected to plunge by 0.6 million barrels for the same period.


Outlook

From intraday perspective, crude prices will trade mixed as the geopolitical tensions from the Crimean peninsula have eased down while the inventory data released by the API last night showed consecutive second week of buildup. Inventory buildup is on account of refinery maintenance in the US. Tonight we have EIA inventory data wherein there are expectations of buildup that can push down crude prices in the evening session.

In the Indian markets, prices will trade mixed on account of the factors mentioned above and further developments in the Crimean region.