Commodities

Oil and natural gas daily review (September 05, 2012)

Contributed by Angel Broking

Crude Oil

Nymex crude oil prices declined by 1.2 percent in yesterday's trading session taking cues from decline in US and European manufacturing which signals slowdown of economic growth. Additionally, strength in the DX also added downside pressure on the prices.

Crude oil prices touched an intra-day low of $94.97/bbl and closed at $95.30/bbl in yesterday's trade. On the domestic bourses, prices fell by 1.4 percent and closed at Rs.5,313/bbl after touching an intra-day low of Rs.5,305/bbl on Tuesday. Depreciation in the Indian Rupee cushioned sharp fall in the crude oil prices on the MCX.

API Inventories Forecast

The American Petroleum Institute (API) is scheduled to release its weekly inventories today and US crude oil inventories are expected to decline by 5.5 million barrels for the week ending on 31st September 2012.

Gasoline stocks are expected to fall by 3.0 million barrels and distillate inventories are expected to drop by 1.5 million barrels for the same week.

Outlook

In today's trade, we expect crude oil prices to trade on a sideways note on the back of decline in US and Euro Zone manufacturing units. Additionally, strength in the DX might also add downside pressure on the crude oil prices.

While on the other hand, expectations of decline in US crude oil inventories will support upside in the prices. Depreciation in the Indian Rupee will cushion sharp fall in the MCX prices.