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Commodities Energy

Oil and natural gas daily review (May 12, 2014)

May 12, 2014, Monday, 05:36 GMT | 00:36 EST | 09:06 IST | 11:36 SGT
Contributed by Angel Broking


Crude Oil

In the last week, Nymex crude oil prices started on a positive note traded sideways for the week hovering around $100 mark.

Prices traded positive as growth in the U.S. services sector accelerated in April, rising at the fastest pace in eight months, providing further evidence that economic activity is regaining momentum. Also, new jobless claims fell last week in the United States, a sign of a strengthening labor market that also helped set a floor beneath U.S. crude oil prices

On the other hand, energy markets are troubled with tensions escalating in Ukraine as Russia, which supplies a third of the European Union's natural gas demand, much of which passes through Ukraine, has threatened to reduce supplies to Kiev in June if no prepayment is received.

In Libya, tribesmen ended a blockade of the El Sharara oilfield and engineers said they hoped to resume pumping within a week.

WTI Crude oil prices touched a weekly low of $98.91/bbl and closed at $99.99/bbl gaining by around 0.23 percent in the last week. On the domestic bourses, prices declined by around 0.28 percent in the last week and closed at Rs.5993/bbl on Friday after touching a weekly low of Rs.5965/bbl.


Outlook

On an intraday basis, we expect crude prices to trade positive on escalation of geo-political tensions in Ukraine. The European Union plans to add about 15 people to its sanctions list against Russia over its annexation of Ukraine’s Crimean region. Whereas, crude inventories in the US are at record highs in the US can exert downside pressure on prices.

On the MCX, crude prices are expected to trade positive taking cues from international markets.