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Commodities Energy

Oil and natural gas daily review (September 03, 2014)

September 3, 2014, Wednesday, 06:02 GMT | 01:02 EST | 09:32 IST | 12:02 SGT
Contributed by Angel Broking


Crude Oil

Oil prices decline on both sides of the Atlantic with Brent crude and WTI crude declining by around 1.2 percent and 3.2 respectively. Prices are trading lower on prospect of slowing oil demand growth in China and Europe, while a strong dollar and ample supplies pushed U.S. prices to a seven-month low.

Concerns have faded over supply disruptions from Iraq, Libya and Russia. Continued supply from key producing regions and tepid demand has left global markets well stocked exerting downside pressure on prices.

On the MCX, crude prices declined by around 2.7 percent and closed at Rs.5665/bbl.

EIA inventory will release tomorrow

Weekly inventory reports from the U.S. Department of Energy's Energy Information Administration (EIA) will be delayed a day due to the Labor Day holiday on Monday.


Natural gas

U.S. natural gas futures fell more than 4 percent on Tuesday as forecasts for cooler weather tempered expectations that a late spike in summer heat would bolster energy usage for air conditioning.

Natural gas prices on the MCX declined by around 3.75 percent taking cues from weak international markets and closed at Rs.238.40/MMbtu.


Outlook

On an intraday basis, we expect crude oil prices to trade lower as world crude supplies remain at comfortable levels. Besides, the high inventory situation across the globe is also an indication that crude demand remains wobbly despite the heightening geo-political tensions between Russia and Ukraine. Slow growth in oil demand from China and Europe will further exert downside pressure on prices.

On the MCX, crude prices are expected to trade on a negative note taking cues from weak international markets.