Commodities

Oil and natural gas daily review (September 17, 2012)

Contributed by Angel Broking

Crude Oil

Nymex crude oil prices increased 2.7 percent week on week taking positive 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 an upside in the prices.

Crude oil prices touched a weekly high of $100.42/bbl and closed at $99.01/bbl in Friday's session. On the domestic bourses, prices gained by 0.5 percent and closed at Rs.5,332/bbl after touching a weekly high of Rs.5,457/bbl on Friday.

Natural Gas

On a weekly basis, Nymex natural gas prices increased around 9.4 percent on the back of positive Federal Reserve Statement of buying $40 billion Mortgage Backed Securities (MBS) every month coupled with weakness in the DX.

However, more than expected rise in US natural gas inventories capped sharp upside in the prices. Gas prices touched a high of $3.07/mmbtu in the last week and closed at $2.944/mmbtu in the last trading session of the week.

On the domestic front, prices gained around 7.5 percent in the last week and closed at Rs.159.7/mmbtu on Friday after touching a high of Rs.170.6/mmbtu during the week. Appreciation in the Indian Rupee capped sharp gains in prices on the MCX.

Outlook

In today's trade, we expect crude oil prices to trade on a positive note on the back of upbeat global market sentiments, favorable economic data from the US 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 will also support an upside in the prices. Appreciation in the Indian Rupee will cap sharp gains in the prices on the MCX.