Commodities

Oil and natural gas daily review (September 20, 2012)

Contributed by Angel Broking

Crude Oil

Nymex crude oil prices declined 3.7 percent on the back of unexpected rise in the US Crude oil inventories. Further, signs of recovery of US Crude oil output, refineries and import facilities after disruptions caused by the Hurricane Isaac amidst weak demand exerted downside pressure on the crude oil prices. However, weakness in the DX cushioned sharp fall in the prices.

Crude oil prices touched an intra-day low of $91.73/bbl and closed at $91.73/bbl in yesterday's session. On the domestic bourses, prices plummeted by 4.3 percent and closed at Rs.4,657/bbl after touching a low of Rs.4,950/bbl on Wednesday.

EIA Crude Oil Inventories

Crude oil inventories rose the most since March 30 to 367.6 million barrels, a six-week high. U.S. gasoline inventories fell by 1.41 million barrels to 196.31 million barrels. U.S. distillate stocks, which include diesel and heating oil, fell by 322,000 barrels to 128.23 million barrels.

Natural Gas

Nymex Natural gas prices ended 0.7 percent higher at $2.80/mmbtu in yesterday's session after touching a high of $2.855/mmbtu. MCX Natural gas prices also ended on a firm note yesterday.

Outlook

In today's session, we expect crude oil prices to trade on a bearish note on the back of weak global market sentiments amidst strength in the DX. Further, unexpected rise in the US crude oil inventories released yesterday is expected to exert downside pressure on the crude oil prices today. Further, assurance by the Saudi Arabia that it will keep the oil prices under control will also act as a bearish factor for the crude oil prices.