Commodities

Oil and natural gas daily review (October 11, 2012)

Contributed by Angel Broking

Crude Oil

Nymex crude oil prices declined around 1.2 percent yesterday taking cues from more than expected rise in the US crude oil inventories along with expectations of slowdown in the growth of China.

However, weakness in the DX cushioned further fall in the prices. Crude oil prices touched an intra-day low of $91.02/bbl and closed at $91.30/bbl in yesterday's trading session.

On the domestic bourses, prices declined by 0.2 percent and closed at Rs.4,882/bbl after touching an intra-day low of Rs.4,866/bbl on Wednesday. However, depreciation in the Indian Rupee prevented further fall in the prices on the MCX.

API Inventories Data

As per the American Petroleum Institute (API) report last night, US crude oil inventories increased by 1.6 million barrels to 364.56 million barrels for the week ending on 5th October 2012. Gasoline inventories gained around 2.5 million barrels to 200.34 million barrels and whereas distillate inventories dropped by 6.2 million barrels to 120.78 million barrels for the same week.

EIA Inventories Forecast

The US Energy Department (EIA) is scheduled to release its weekly inventories report today at 8:00pm IST and US crude oil inventories is expected to rise by 0.8 million barrels for the week ending on 5th October 2012. Gasoline stocks are expected to remain unchanged whereas distillate inventories are expected to drop by 0.5 million barrels for the same period.

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, expectation of rise in the crude oil inventories is likely to exert downside pressure on 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.