Commodities

Oil and natural gas daily review (September 04, 2012)

Contributed by Angel Broking

Crude Oil

Nymex crude trading was closed in yesterday's trading session on the eve of US Labour Day Holiday.

On the domestic bourses, crude oil prices increased by 0.6 percent on the back of depreciation in the Indian Rupee and closed at Rs.5,390/bbl after touching an intra-day high of Rs.5,405/bbl on Monday.

News

As per the National Hurricane Centre yesterday Tropical Storm Leslie moved closer to Bermuda, where it may arrive this weekend as a hurricane. It's the 12th storm of the Atlantic hurricane season, which runs from June 1 to Nov. 30. Leslie has top winds of 60 miles (97 kilometres) per hour and is moving north-northwest at 3 mph.

Outlook

We expect crude oil prices to trade on a sideways note on the back of expectations of stimulus measures from Federal Reserve along with weakness in the DX. Additionally, optimism statement from ECB President that central bank will be able to comfortable buy three year government bonds to reduce the borrowing costs will also support upside in the prices.

While on the other hand, downgrade of the European Union outlook to negative by the Moody's credit rating agency can add downside pressure on the prices. In the Indian market appreciation in the Rupee can cap sharp gains in the prices.