Energy Insight Report - Sep 04, 2015 : Karvy Commodities

Crude Oil: Technical Recommendation:

Review:

• Crude oil prices yesterday managed having some gains in absence of Chinese data

• WTI for the October month settled at $46.75/ barrel gaining more than a percent, whereas Brent for the same month gained just 18 cents registering it at $50.68/ barrel

Outlook:

 As China celebrated their world war victory day, crude oil prices eased having lack of Chinese data. Earlier, turmoil in China slumped crude prices to their recession lows. Crude prices this week bounced from having heavy gains on Monday to losing more than 7% on Tuesday. Movement in oil has created confusion in market.Looking over the major cues, crude still seems bearish as the OPEC and its majors like Saudi seems not in mood in curtailing their production figures. Cumulatively, crude oil production in August again moved up from the OPEC side. Over the US region, as the summer driving season have come to an end, refiners are seeing no further gains in processing extra crude. Seeing shortage in demand side, Saudi, biggest exporter of crude oil has discounted their October month’s Brent crude to the US. 

As per news agencies, John Kerry, the other day showed signs of supporting Iran as any action against the deal by the US could turn India, China & Japan against them. Today, during late evening, Baker Hughes will release their weekly rig count data. As per the data, the number of active crude oil rigs is moving up past six weeks. Though the rate of addition has gone down as last week only one rig got added up, still in this oversupplied situation any extra rig will have its negativity over crude oil. 

Natural Gas Technical Recommendations:

Review:

• NG prices yesterday gained almost 3% at NYMEX for the October contract registering it at $2.725/ MMBTu

Outlook:

 Despite of having heavy buildup in NG stockpiles as per DoE, NG prices got catalyzed yesterday due to change in weather forecast over the eastern & southern US. As per news agencies, temperatures over the New York region may move up by almost 8 degree Fahrenheit during this period. DoE showed 94 bcf NG injections last week, which shows more production levels compared to consumption. 

Today, during early morning session, NG is down by almost 0.50%, which is expected to remain downside. We recommend selling NG from higher levels for the day.

Courtesy : Karvy Commodities