Monday 28 October 2013

NATURAL GAS AND OIL DAILY REVIEW FOR TODAY 28-OCT-2013

DAILY OIL & NATURAL GAS REVIEW 28-10-2013

Crude Oil

Nymex crude oil prices declined around 3 percent in the last week on the back of rising trend in API and US crude oil inventories. Further, rise in US crude oil production along with slow refinery activity expectations exerted downside pressure on the prices. Additionally, decline in US manufacturing data acted as a negative factor.
Prices tend to recover in later part of the week but remained negative after unfavorable economic data from the US increased expectations of delay in QE tapering program by the Federal Reserve. Crude oil prices touched a weekly low of $95.95/bbl and closed at $97.90/bbl in last trading session of the week.
On the domestic bourses, prices slipped around 2.4 percent and closed at Rs.6045/bbl on Friday after touching a low of Rs.5937/bbl in the last week. Rupee depreciation restricted sharp fall in prices.
 Natural Gas
On a weekly basis, Nymex natural gas prices slipped by more than 1 percent on the back of more than expected rise in US natural gas inventories.

Weakness in the DX prevented sharp fall in prices. Gas prices touched a weekly low of $3.545/mmbtu and closed at $3.727/mmbtu in last trade of the week.

In the Indian markets, prices dropped around 1.6 percent and closed at Rs.227.30/mmbtu on Friday after touching a low of 218.60/mmbtu in the previous week.

Outlook


From the intra-day perspective, we expect crude oil prices to trade higher on the back of expectations of delay in QE tapering program by the Federal Reserve. Further, weakness in the DX will support an upside in prices. Additionally, forecast for rise in US industrial production data in the evening session will act as positive factor for prices. But, rising trend in inventories, increase in US crude production along with expectations of ease of sanctions on Iran will cap sharp gains in prices. In the Indian markets, Rupee appreciation will restrict upside in oil prices.
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