Commodities

Oil and natural gas daily review (October 04, 2012)

Contributed by Angel Broking

Crude Oil

Nymex crude oil prices declined sharply around 4.1 percent yesterday taking cues from US Energy Department (EIA) report of increase in output along with decline in demand. According to the latest Energy department crude output rose 11000 barrels a day to 6.52 million last week. Total fuel demand fell 0.3 percent to 18.3 million barrels a day in the four weeks ended Sept. 28, the lowest level since April.

Further, strength in the DX also exerted downside pressure on the prices. Crude oil prices touched an intra-day low of $87.70/bbl and closed at $88.10/bbl in yesterday's trading session.

On the domestic bourses, prices declined by 4.4 percent tracking bearishness in the Nymex crude oil prices along with appreciation in the Indian Rupee and closed at Rs.4,645/bbl after touching an intraday low of Rs.4,635/bbl on Wednesday.

EIA Inventories Data

As per the US Energy Department (EIA) report last night, US crude oil inventories declined unexpectedly by 482,000 barrels to 364.70 million barrels for the week ending on 28th September 2012. Gasoline stocks rose by 114,000 barrels to 195.90 million barrels and whereas distillate stockpiles drop by 3.67 million barrels to 124.10 million barrels for the last week.

News

As per the US Energy Department (EIA) report yesterday, crude output increased by 11,000 barrels a day to 6.52 million barrels in the last week, the highest since December 1996. Also, total fuel demand declined by 0.3 percent to 18.3 million barrels a day in the last four week ending on 28th September. The decline in demand is at the lowest level since April.

Outlook

In today's session, we expect crude oil prices to trade rangebound on the back of upbeat global market sentiments along with weakness in the DX. Sufficient supplies of crude oil are however expected to exert downside pressure expected to exert downside pressure on the crude oil pressure. On the domestic front appreciation in the Indian Rupee will pressurise prices on the MCX.