Commodities

Oil and natural gas daily review (October 01, 2012)

Contributed by Angel Broking

Crude Oil

Nymex crude oil prices declined 0.85 percent week on week on the back of renewed concerns of the Euro zone region which might in turn hamper the growth of the entire global economy resulting into decline in the demand. Further, strength in the DX along with increase in crude oil production and decline in gasoline consumption as per the reports of US Energy Department (EIA) also added to the losses of the crude oil prices.

However, unexpected decline in US crude oil inventories cushioned sharp fall in the prices. It touched a low of $88.95 in the last week and closed at $92.19/bbl in the last trading session of the week.

On the domestic bourses, prices declined by 1.3 percent as a result of appreciation in the Indian Rupee and closed at Rs.4,895/bbl on Friday after touching a low of Rs.4,801/bbl in the last week.

Natural Gas

On a weekly basis, Nymex natural gas prices gained around 13.5 percent on the back of ease in concerns that stockpiles will reach its limits before the winter weather which will boost the demand for the commodity.

However, further upside in the prices was capped on account of more than expected rise in US natural gas inventories. Gas prices touched a high of $3.317/mmbtu during the week and closed at $3.282/mmbtu in the last trading session of the week.

In the Indian markets, prices gained around 15 percent and closed at Rs.175.3/mmbtu on Friday after touching a high of Rs.176.5/mmbtu in the last week.

Outlook

In today's session, we expect crude oil prices to trade lower on the back of weak global market sentiments along with strength in the DX. On the domestic front depreciation in the Indian Rupee will however, cushion sharp fall in the MCX crude prices.