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Commodities Energy

Oil and natural gas daily review (March 24, 2014)

March 24, 2014, Monday, 05:31 GMT | 02:31 EST | 11:01 IST | 13:31 SGT
Contributed by Angel Broking


Crude Oil

Nymex crude oil prices started the week on a positive note moved in a band of $2 for the last week and closed at $98 a barrel. Prices rallied in start of the last week on the reaction by the United States and Europe to the outcome of the weekend referendum on whether Crimea should join Russia. However, prices dropped when U.S. and European sanctions were imposed targeting Russian and Crimea individuals and not broad trade, leaving oil exports from the second largest producer in the world untouched.

Crude markets also took confidence from comments by Russian President Vladimir Putin that he would not seize other regions of Ukraine outside Crimea. Further, more than expected rise in API and US crude oil inventories exerted downside pressure on the prices. Buildup in crude inventories was on account of low refinery utilization rates due to maintenance. Crude oil prices touched a weekly high of $100.82/bbl and closed at $99.46/bbl in the last trading session of the week.

On the domestic bourses, prices gained more than 1 percent in the last week and closed at Rs.6121/bbl on Friday after touching a weekly high of Rs.6135/bbl.


Natural Gas

Natural gas prices fell by more than 2 percent last week on the back of mild weather conditions, less demand for gas and less drawdown in inventories. The prices touched a weekly low of $4.286/mmbtu before closing at $4.315/mmbtu on Friday.

MCX Natural Gas prices fell by 3.4 percent last week owing to Rupee appreciation and touched a weekly low of Rs.261.3/mmbtu.


Outlook

From intraday perspective, crude prices will trade higher on the back of geo-political tensions back in forefront. In addition positive economic indicators from will US also help crude prices to gain. The number of Americans filing for jobless benefits hovered near three-month lows last week and factory activity in the Mid-Atlantic region rebounded this month.

In the Indian markets, prices will trade mixed on account of the rupee weakness and further developments between Russia and the US.

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