Commodities

Oil and natural gas daily review (October 31, 2012)

Contributed by Angel Broking

Crude Oil

Nymex crude oil prices gained 0.2 percent due to better corporate earnings that raised confidence and expectations that demand might witness a rise due to global recovery.

Further, six refineries curbed production accounting for 1.22 million barrels of the area's crude processing capacity of 1.29 million barrels a day because of Hurricane Sandy. Crude oil prices touched an intra-day high of $86.24/bbl and closed at $85.69/bbl on Tuesday.

On the domestic bourses, prices declined 0.2 percent and closed at Rs.4,663/bbl after touching a high of Rs.4,683/bbl in yesterday's session.

API Inventories Data

As per the American Petroleum Institute (API) report last night, US crude oil inventories increased more than expected by 2.1 million barrels to 371.70 million barrels for the week ending on 26th October 2012. Gasoline inventories declined around 173,000 barrels and whereas distillate inventories fell by 2.6 million barrels for the same week.

EIA Inventories Forecast

The US Energy Department (EIA) which was scheduled to release its weekly inventories report today at 8:00pm IST will be released tomorrow because of disruption from Tropical Storm Sandy and US crude oil inventories is expected to rise by 1.5 million barrels for the week ending on 26th October 2012. Gasoline stocks are expected to remain gain by 0.2 million barrels whereas distillate inventories are expected to drop by 1.3 million barrels for the same period.

Outlook

In the intra-day, we expect crude oil prices to trade on a negative bias on the back of sufficient US crude oil inventories. Weakness in the DX along with upbeat global market sentiments is expected to cushion sharp fall in the crude oil prices. In the domestic markets depreciation in the Indian rupee is expected to cushion sharp fall in the MCX crude oil prices.