Commodities

Oil and natural gas daily review (September 06, 2012)

Contributed by Angel Broking

Crude Oil

Nymex crude oil prices gained around 0.1 percent yesterday taking cues from expectations that ECB policymakers will discuss a plan on unlimited bond buying to curtail the Euro Zone debt crisis.

Additionally, more than expected decline in US crude oil inventories along with weakness in the DX also supported an upside in the prices. Crude oil prices touched an intra-day high of $96.26/bbl and closed at $95.40/bbl in yesterday's trading session.

On the domestic bourses, prices increased by 0.3 percent on account of depreciation in the Indian Rupee and closed at Rs.5,327/bbl after touching an intra-day high of Rs.5,345/bbl on Wednesday.

API Inventories Data

As per the American Petroleum Institute (API) report last night, US crude oil inventories declined more than expectation by 7.2 million barrels to 359.30 million barrels for the week ending on 31st September 2012. Gasoline inventories fell by 2.3 million barrels to 201.84 million barrels and whereas distillate inventories drop by 1,32,000 barrels to 126.36 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 decline by 5.3 million barrels for the week ending on 31st August 2012. Gasoline stocks are expected to fall by 3.4 million barrels whereas distillate inventories are expected to drop by 1.9 million barrels for the same period.

Outlook

In today's trade, we expect crude oil prices to trade on a sideways with upward bias due to mixed global market sentiments along with weakness in the DX. Further expectation of decline in the US Crude oil inventories along with lower API inventories is likely to add to the gains of the crude oil prices in today's session.

In the domestic markets depreciation in the Indian rupee is expected to support Crude oil prices on MCX to strengthen.