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Commodities » Energy

Oil and natural gas daily review (May 20, 2014)

May 20, 2014, Tuesday, 07:03 GMT | 02:03 EST | 11:33 IST | 14:03 SGT
Contributed by Angel Broking


Crude Oil

Weak dollar and expiration of June contract sent WTI oil prices to near one month high on Monday. The U.S. dollar fell to its lowest level in more than three months against the yen, which is supportive for oil and commodities priced in dollars.

Meanwhile, Libya's major western oilfields, El Sharara and El Feel, remained shut a week after the government said it reached a deal with protesters to reopen them. National output has been capped at 210,000 barrels per day (bpd), far below the 1.4 million bpd produced until mid-2013.

On the other side, the conflict in Ukraine is supporting oil, as U.S. President Barack Obama and French President Francois Hollande said Russia faced significant costs if it continues "provocative and destabilizing behavior.

API inventory forecast

The API is scheduled to release its weekly inventories report tonight at 8:00pm IST and US crude oil inventories is expected to gain by 1 million barrels for the week ending on 16th May 2014. Gasoline stocks are expected to remain unchanged at 213.2 million barrels whereas distillate inventories are expected to decline by 0.3 million barrels for the same time period.


Outlook

On an intraday basis, crude prices are expected to trade with a positive bias as the conflict in Ukraine is a never ending story lifting prices. While the weakness in the dollar index coupled with delay in restart of oil fields in Libya will also act as a positive factor.

Meanwhile, the API data due to be released tonight will provide further cues to oil prices.

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