CRUDE OIL AND NATURAL GAS DAILY REVIEW FOR TODAY 29-OCT

CRUDE OIL AND NATURAL GAS DAILY REVIEW FOR TODAY 29-OCT 

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Crude Oil

Nymex crude oil prices gained around 0.8 percent yesterday on the back of decline in Libya's crude production to 250,000 barrels a day due to labor protests. Further, rise in US industrial production along with expectations of delay in QE tapering by the Federal Reserve supported an upside in prices. Additionally, drop in Iraq's crude exports to 62.1 million barrels or 2.07 million barrels a day in September acted as a positive factor.

However, sharp upside in prices was capped due to strength in the DX along with weak market sentiments in later part of the trade. Crude oil prices touched an intra-day high of $98.82/bbl and closed at $98.68/bbl in yesterday's trading session.

On the domestic bourses, prices rose 0.7 percent and closed at Rs.6090/bbl after touching an intra-day high of Rs.6108/bbl on Monday.

API Inventories Forecast

The American Petroleum Institute (API) is scheduled to release its weekly inventories today and US crude oil inventories are expected to increase by 3.2 million barrels for the week ending on 25th October 2013.

Gasoline stocks are expected to fell by 1.0 million barrels and distillate inventories are expected to slip by 1.0 million barrels for the same week.


Outlook

From the intra-day perspective, we expect crude oil prices to trade lower on the back of forecast for rise in API crude oil inventories. Further, estimates of decline in US consumer confidence data in evening session along with mixed market sentiments will exert downside pressure on prices. But, decline in Libya's crude production and fall in Iraq's crude exports will cushion sharp downside in prices. Additionally, expectations of delay in QE tapering by the Federal Reserve coupled with weaker DX will restrict downside movement in prices. In the Indian markets, Rupee depreciation will prevent negative movement in oil prices.

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