New York: 07:40 || London: 12:40 || Mumbai: 16:10 || Singapore: 18:40

Commodities Energy

Oil and natural gas daily review (March 28, 2014)

March 28, 2014, Friday, 05:37 GMT | 01:37 EST | 10:07 IST | 12:37 SGT
Contributed by Angel Broking


Crude Oil

WTI crude oil prices surged by 1 percent and hit a three week high in yesterday’s session on strong US economic data coupled with the end of refinery maintenance season signaling strong demand ahead in the coming weeks. U.S. crude's gains gave a lift to Brent, which also drew support from worries that possible Western sanctions on Russia's energy sector could disrupt global supplies.

The U.S. Senate and House of Representatives easily passed bills to provide aid to Ukraine, back a $1 billion loan guarantee for the Kiev government and impose sanctions on Russians and Ukrainians over Russia's annexation of Crimea. Also, The United States and the European Union agreed on Wednesday to work together on preparing possible further economic sanctions in response to Russia's actions in Ukraine and to make Europe less dependent on Russian gas.

On the MCX, crude prices jumped by 1.6 percent and closed at Rs.6139 per barrel after touching an intra-day high of Rs.6148 per barrel.


Natural Gas

US natural gas closed up by around 3 percent after the government data released reported a slightly bigger than expected withdrawal of inventories from storage.

Natural Gas inventory update

The US Energy Department (EIA) released its weekly inventories report last night showed that natural gas inventories declined by 57 bcf which is 90 bcf below a year earlier and well above five year average of 7 Bcf.


Outlook

Positive economic momentum in the US has raises prospects of growth in turn hopes of high demand for energy. In addition the sanctions imposed by the US on Russia may cause disruptions of supplies in crude markets. U.S. crude, will continued its upward trend following Wednesday's data that showed a further drain in oil inventories at the Cushing, which hit their lowest level since January 2012. In addition, Low supply out of Libya and Nigeria lent further support to Brent crude prices.

On the MCX, prices will trade positive tracking cues from international markets and the escalation of geo-political tensions.