New York: 16:03 || London: 21:03 || Mumbai: 00:33 || Singapore: 03:03

Commodities Energy

Oil and natural gas daily review (May 29, 2014)

May 29, 2014, Thursday, 04:43 GMT | 23:43 EST | 08:13 IST | 10:43 SGT
Contributed by Angel Broking


Crude Oil

Profit booking coupled with a rise in crude inventories reported by API led to fall in WTI oil prices by more than 1 percent. However, sharp downside in prices were cushioned on comments from as the European energy commissioner, which said it is unlikely Kiev and Moscow will resolve all issues in the gas price dispute before Sunday's June 1 deadline.

Libyan oil output shrank again because an armed group disrupted operations at Hariga port. However, traders remain focused on the economic data from the US showing an unexpected rise in long-lasting manufactured orders in April and a boost in consumer confidence in May.

Since equities and crude move in tandem, Investors' appetite for equities has been supported by recent strong U.S. economic data and expectations of monetary easing by the European Central Bank

API inventory update

The API released its weekly inventories report last night at 8:30pm IST and US crude oil inventories rose by 3.5 million barrels to 383.9 million for the week ending on 23rd May 2014. Gasoline stocks fell by 1.4 million barrels whereas distillate inventories rose by 0.82 million barrels for the same time period.

EIA inventory forecast

The EIA is scheduled to release its weekly inventories report tonight at 8:30pm IST and US crude oil inventories is expected to gain by 0.5 million barrels for the week ending on 23rd May 2014. Gasoline stocks are expected to to increase by 0.3 million barrels whereas distillate inventories are expected to increase by 0.8 million barrels for the same time period.


Outlook

On an intraday basis, we expect crude prices to trade sideways as profit booking further will exert downside pressure on prices while the optimism in the US economy on account of strong economic data will act as a positive factor. In Libya, the crude output still remains a question mark as production at major oilfields are still at halt raising concerns on the supply side. Meanwhile, the EIA inventory data due to be released tonight will provide further trajectory to oil prices.

On the MCX, crude prices is expected to trade sideways taking cues from international markets, however rupee weakness in today’s session will act as a positive factor.