Commodities

Oil and natural gas daily review (October 10, 2012)

Contributed by Angel Broking

Crude Oil

Nymex crude oil prices increased around 3.3 percent yesterday taking cues from unrest in the Middle East between Syria and Turkey thereby creating supply concerns from the region.

However, further upside in the prices was capped as a result of International Monetary Fund (IMF) cuts the global growth forecast to 3.3 percent in 2012 along with strength in the DX. Crude oil prices touched an intra-day high of $92.91/bbl and closed at $92.39/bbl in yesterday's trading session.

On the domestic bourses, prices gained by 4 percent on account of depreciation in the Indian Rupee and closed at Rs.4,890/bbl after touching an intra-day high of Rs.4,903/bbl on Tuesday.

API Inventories Forecast

The American Petroleum Institute (API) is scheduled to release its weekly inventories today and US crude oil inventories are expected to increase by 1.0 million barrels for the week ending on 5th October 2012.

Gasoline stocks are expected to rise by 0.2 million barrels and distillate inventories are expected to drop by 0.3 million barrels for the same week.

Outlook

We expect crude oil prices to trade on weak note on the back of weak global market sentiments along with strength in the DX. Further, expectation of rise in the crude oil inventories is likely to exert downside pressure on the crude oil prices. However, any fresh tension in the Middle East may cushion sharp fall in 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.