Energy Market Outlook and Sector Updates: Nirmal Bang

natural gasOil prices fell again on Tuesday by nearly 40 cents to $50.14 per barrel on the declining demand and swine flu.

US Natural Gas gained more than 2% on short covering ahead of the May expiry.

The stocks of crude in the US went up by 4.6 mn barrels, more than twice expected, reported American Petroleum Institute.

The Output of Natural Gas is expected to go down because of a record decline in the number of gas rigs to below 700. This may be balanced by a weak heating demand leading to a steady build up in inventories and mild weather forecast.

Crude oil inventory is building up in the US on declining demand. We believe that it is showing good amount of strength despite of all the bearish news and prices are not moving down sharply. We recommend buying crude oil at dips and if gasoline stocks rise more than expected then we may see crude oil testing Rs. 2550-2575 levels.

Crude oil is holding on very well in spite of the bearish news. It is technically range bound between Rs. 2450- RS. 2540. Breaching these levels we might see a direction in prices. Buying is recommended at Rs. 2475 with a stop loss of Rs. 2450 targeting RS. 2525-2540.

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