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Commodities Energy

Oil and natural gas daily review (May 15, 2014)

May 15, 2014, Thursday, 05:50 GMT | 00:50 EST | 09:20 IST | 11:50 SGT
Contributed by Angel Broking


Crude Oil

Oil prices rose in yesterday’s trading session as a draw in crude stocks at the Cushing, Oklahoma, and gasoline stocks pushed Brent and US crude prices to three weeks high.

On the geo-political side, the Ukraine crisis eased slightly as Russia backed off its threat to cut Kiev's natural gas supply if the country did not pay in advance for June. It instead asked that Kiev pay just part of the "debt" Moscow it owes.

Traders have also been eyeing Libya, where state officials and rebel leaders have gone back and forth on agreements to reopen several oilfields. The El Feel oilfield, also known as Elephant, resumed production, Libya's state oil company said on Wednesday, after protesters agreed to end their blockade of the pipelines connecting that field to the port of Mellitah.

EIA inventory update

The EIA released its weekly inventories report last night at 8:00pm IST and US crude oil inventories rose by 0.9 million barrels to 398.5 million for the week ending on 9th May 2014. Gasoline stocks declined by 0.772 million barrels whereas distillate inventories decreased by 1.1 million barrels for the same time period.


Natural Gas

Natural gas prices on the NYMEX rose by 0.57 percent on short covering although the inventories this week are expected to show a build up as the injection season has already begun in the US.

On the MCX, NG prices declined by 0.31 percent on account of profit booking and closed at Rs.259.10/MMBtu.


Outlook

On an intraday basis, we expect crude oil prices to trade on a mix note as crude inventories in the US remain at their highs while the geo-political tensions between Russia and Ukraine seem to have eased. Also, hopes of Libyan exports in energy markets can exert downside pressure on prices. On the other hand, the economic data from US has given hopes of higher incremental demand for crude acting as a positive factor.

On the MCX, crude prices are expected to trade on a mix note taking cues from international markets.