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Commodities

Oil and natural gas daily review (October 08, 2012)

October 8, 2012, Monday, 05:29 GMT | 00:29 EST | 08:59 IST | 11:29 SGT
Contributed by Angel Broking


Crude Oil

Nymex crude oil prices declined by 2.5 percent in the last week taking cues from increase in supplies along with decline in demand as per the US Energy Department report (EIA). Additionally, rising supplies from Organization of Petroleum Exporting Countries (OPEC) also acted as a negative factor for the crude oil prices.

However, weakness in the DX along with rising tensions in Middle East capped sharp downside in the prices. Crude oil prices touched a low of $87.70/bbl during the week and closed at $89.92/bbl in the last trading session of the week.

On the domestic bourses, prices declined 4.8 percent and closed at Rs.4,678/bbl after touching an weekly low of Rs.4,603/bbl in the last week.


Natural Gas

On a weekly basis, Nymex natural gas prices gained around 3.5 percent on the back of expectations of rise in the demand in the coming months. However rise in the inventories capped sharp gains.

Natural gas prices touched a high of $3.546/mmbtu in the last week and closed at $3.397/mmbtu in last trading session.

In the domestic markets prices declined by 0.2 percent on account of appreciation in the Indian Rupee and closed at Rs.174.90/mmbtu on Froday after touching a low of Rs.173.7/mmbtu during the week.


Outlook

We expect crude oil prices to trade on a bearish note eyeing sufficient supplies with subdued demand for the same. Strength in the DX will also act as a bearish factor for the crude oil prices. On the domestic front depreciation in the Indian Rupee will cushion sharp fall in the crude oil prices on the MCX.

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