Commodities » Energy

Oil and natural gas daily review (March 22, 2013)

Contributed by Angel Broking

Crude Oil

Nymex crude oil prices declined around 0.5 percent yesterday taking cues from decline in German and French manufacturing data which led to expectations of decline in demand for the fuel. Additionally, petroleum deliveries decline by 4.1 percent to 18 million barrels a day in February which is at lowest level since 1993 as per the American Petroleum Institute (API) monthly report yesterday that also acted as a negative factor for the oil prices.

However, sharp downside in the prices was cushioned on account of positive US manufacturing data coupled with weakness in the DX. Further, fall in the prices was prevented as a result of Organization of Petroleum Exporting Countries (OPEC) will reduce shipments by 0.2 percent to 17.37 million barrels a day for a period of four weeks from earlier crude shipments of 23.72 million barrels a day as per the Oil movements. Crude oil prices touched an intra-day low of $91.84/bbl and closed at $92.45/bbl in yesterday's trading session.

On the domestic bourses, prices declined by 0.8 percent on the back of appreciation in the Indian Rupee and closed at Rs.5053/bbl after touching an intra-day low of Rs5036./bbl on Thursday.


Natural Gas

Nymex natural gas prices declined around 0.5 percent yesterday on the back of less than expected decline in US natural gas inventories coupled with forecast for warmer weather conditions.

However, sharp downside in the prices was cushioned on account of weakness in the DX. Gas prices touched an intra-day low of $3.891/mmbtu and closed at $3.93/mmbtu on Thursday.

On the domestic front, prices declined by 0.3 percent and closed at Rs.214.5/mmbtu after touching an intra-day low of Rs.211.80/mmbtu in yesterday's trade.

EIA Inventories Data

US Energy Information Administration (EIA) released its weekly inventories yesterday and US natural gas inventory declined less than expected by 62 billion cubic feet (bcf) which stood at 1.876 trillion cubic feet for the week ending on 15th March 2012.


Outlook

From the intra-day perspective, we expect crude oil to trade on positive note on the back of cut in the shipments from the OPEC, positive manufacturing data from US, China and rise in UK's retail sales in yesterday's trading session along with shutdown of pipeline in Libya. However, sharp upside in the prices will be capped on account of weak global market sentiments coupled with strength in the DX. Depreciation in the Rupee will support an upside in the prices.