Commodities

Oil and natural gas daily review (September 14, 2012)

Contributed by Angel Broking

Crude Oil

Nymex crude oil prices increased around 1.3 percent yesterday taking cues from Federal Reserve Statement of buying $40 billion Mortgage Backed Securities (MBS) every month. Additionally, expectations of disruption in oil supply after unrest in Middle East and North Africa coupled with weakness in the DX also supported upside in the prices.

Crude oil prices touched an intra-day high of $98.58/bbl and closed at $98.30/bbl in yesterday's trading session. On the domestic bourses, prices gained by 0.4 percent and closed at Rs.5,374/bbl after touching an intra-day high of Rs.5,445/bbl on Thursday.

Natural Gas

Nymex natural gas prices declined around 1.1 percent yesterday on the back of more than expected increase in US natural gas inventories. However, weakness in the DX cushioned sharp fall in the prices.

Natural gas prices touched an intra-day low of $2.96/mmbtu and closed at $3.024/mmbtu on Thursday. In the Indian markets prcies declined around 2.4 percent and closed at Rs.164.80/mmbtu after touching an intra-day low of Rs.163.40/mmbtu in yesterday's trading session.

EIA Inventories Data

US Energy Information Administration (EIA) released its weekly inventories yesterday and US natural gas inventory has increased more than expected by 27 billion cubic feet (bcf) which stood at 3.429 trillion cubic feet for the week ending on 7th September 2012.

Outlook

In today's trade, we expect crude oil prices to trade on a positive note on the back of upbeat global market sentiments after statement from US Federal Reserve Chairman Ben Bernanke along with weakness in the DX. Additionally, unrest in Middle East and North Africa which will disrupt crude oil supplies coupled with rising tension from Iran expanding its nuclear program. Appreciation in the Indian Rupee will cap sharp gains in the prices on the MCX.