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Commodities Energy

Oil and natural gas daily review (May 05, 2014)

May 5, 2014, Monday, 12:36 GMT | 08:36 EST | 17:06 IST | 19:36 SGT
Contributed by Angel Broking

Crude Oil

In the last week, Nymex crude oil prices started on a positive note however later in the week changed its course as and traded on declining trajectory as crude inventories in the US at 397.97 are at all time highs in the history of the country. Hopes of rebound in Libya’s exports and muted economic data from China exerted downside pressure on prices.

However, sharp downside in prices were cushioned as The United States slapped sanctions on seven Russian government officials and 17 companies linked to Russian President Vladimir Putin last week in a fresh attempt to force Moscow to back down from its intervention in Ukraine.

Prices were also supported by escalation of Violence in Libya as On Tuesday, gunmen stormed Libya's parliament, wounding several people, while a suicide bomber in a car killed at least two people and wounded two others at an army camp in the eastern city of Benghazi. These developments raised questions about how soon oil flows from Libya resumes. However prices declined in the later part of the week as crude inventories in the US are at all time highs at 394 million barrels raising prospects of higher supplies.

WTI Crude oil prices touched a weekly low of $98.74/bbl and closed at $99.76/bbl last week declining by around 1.07 percent in the last week.

On the domestic bourses, prices declined by around 2.5 percent in the last week and closed at Rs.6010/bbl on Friday after touching a weekly low of Rs.5962/bbl.


On an intraday basis we expect crude prices to trade sideways to positive as NYMEX crude prices are trading positive in the US. However, sharp upside in prices will be capped as crude inventories in the US are at all time highs acting as a negative factor. Besides, the bad economic data from China and restart of Libyan crude exports can exert downside pressure on prices.

On the MCX, crude prices are expected to trade sideways taking cues from weak international markets and rupee movements.