Commodities

Oil and natural gas daily review (October 09, 2012)

Contributed by Angel Broking

Crude Oil

Nymex crude oil prices declined by 0.6 percent in yesterday's trading session taking cues from expectations that Euro Zone Finance Ministers meeting to fight the region's debt crisis along with slowdown in Asia will curb the demand for the fuel.

Additionally, strength in the DX also exerted downside pressure on the prices. Crude oil prices touched an intra-day low of $88.21/bbl and closed at $89.30/bbl in yesterday's trading session.

On the domestic bourses, prices increased by 0.8 percent as a result of depreciation in the Indian Rupee and closed at Rs.4,700/bbl after touching an intra-day low of Rs.4,625/bbl on Monday.

Natural Gas

Nymex natural gas prices gained around 0.7 percent yesterday on the back of expectations of unseasonably cold weather which will lead to increase in demand for the fuel.

However, stronger DX capped sharp upside in the prices. Gas prices touched an intra-day high of $3.431/mmbtu and closed at $3.42/mmbtu in yesterday's trading session.

On the domestic front, prices gained by 2.5 percent as a result of depreciation in the Indian Rupee and closed at Rs.179.30/mmbtu after touching an intra-day high of Rs.180.50/mmbtu on Monday.

Outlook

We expect crude oil prices to trade on weak note on the back of mixed global market sentiments along with strength in the DX. Further IMF reducing the global growth forecast is likely to add pressure to the crude prices today. On the domestic front depreciation in the Indian Rupee will cushion sharp fall in the crude oil prices on the MCX.