Energy Insight Report - Sep 09, 2015 : Karvy Commodities

By  Paul Ploumis 09 Sep 2015  Last updated at 07:22:09 GMT

Crude prices last day went on a negative note for major part of the day. Brent got benefits from the China side as well as fresh updates from the OPEC & Iran side. Though Chinese data last day stood on negative side, but market took it on a positive note expecting some monetary policy easing by their Central Bank.

Energy Insight

Crude Oil: Technical Recommendation

Review:

• Crude oil prices at NYMEX after showing heavy losses during the day went down marginally at closing
• WTI for the October month contract went down by just 11cents registering at $45.94/ barrel, whereas Brent for the same month contract gained almost 4% registering at 49.52/ barrel

Outlook: Crude prices last day went on a negative note for major part of the day. Brent got benefits from the China side as well as fresh updates from the OPEC & Iran side. Though Chinese data last day stood on negative side, but market took it on a positive note expecting some monetary policy easing by their Central Bank. Updates from the OPEC cartel also pushed up Brent prices. As the giants would meet on Thursday at Doha, policies with regards to production figures may get reformulated. Certain OPEC countries requested the same earlier. IAEA on the other hand extended Iran’s nuke deal by three months and the new deadline got extended till March, 2016. Seeing the above mentioned factors, Brent crude outperformed WTI which also expanded spread b/w the same. On US side, due to their Labor Day holiday, DoE’s inventory data would get released this Thursday. Due to seasonal maintenance shutdown of the refineries, overall stockpiles may rise this time as well. Products side inventory may fall gain. API would also release their inventory data on Thursday morning IST. Prices during early morning session is bit high, almost 0.50%. This trend is expected to continue for the day. Any fresh cues may get developed post release of DoE’s crude inventory data tomorrow. Till that time prices may show some recovery giving some buying opportunities.

Natural Gas Technical Recommendations

Review:

• NG prices yesterday moved up as the weather forecast over the US changed to hot weather conditions
• Prices at NYMEX for the October month stood $2.710/ MMBTu i.e 2% higher than its previous closing

 Outlook: NG prices last day got catalyzed due to change in weather conditions over the US. As seen in figures on right hand side, warm weather is getting prevailed, which yesterday was showing mild conditions. Prices today are down by more than 0.50% during early morning session, which is due to negative expectations from the upcoming inventory data. Due to Labor Day holiday in the US, DoE will release their NG inventory data on Friday. Last week’s heavy injections by 94 bcf has again bearish the commodity. Number of NG rigs also remained same last week, which would lead to same/ higher production levels

Courtesy :Karvy Commodities