Energy Trading Update and Market Outlook: Nirmal Bang
Crude futures in U. S. steadied below $46 a barrel, after falling nearly 9 percent a day earlier as worries about the U. S. banking sector hit equity markets. The U. S. dollar rallied on safe-haven bids.
New York Mercantile Exchange natural gas futures ended down sharply on Monday, as a steep slide in crude, milder weather forecasts and growing supplies pressured the complex despite a rebound in physical prices.
Weekly U. S. petroleum inventory data were forecast to show that crude oil supplies rose for the seventh time in a row last week as refinery demand remained low and imports edged higher. The average forecast called for a 2.6-millionbarrel build in crude oil stocks. The survey also forecast that distillate supplies, which include heating oil and diesel, would show a drawdown of
500,000 barrels while gasoline inventories were forecast to have declined 800,000 barrels, on average. Refinery utilization was forecast to have risen 0.5 percentage point to 80.9 percent of capacity.
AccuWeather. com expects temperatures in the Northeast and Midwest, key gas consuming regions, to average below normal early this week, and then warm to above normal later in the week and next week as highs climb above 70s Fahrenheit. This is slightly negative for Natural gas.
Crude oil futures crashed on NYMEX closing down by more than 9%. It breached that narrow range of $48-$52 in which it was trading and is now trading with a negative bias. We expect crude oil to trade down during the day but we believe that in natural gas, any such decline of 3-4% presents good buying opportunity.
Crude: Crude witnessed a triangular break-down yesterday. The rising ADX with sharp rise in –DI, indicate further weakness in crude prices during the day. The prices can fall down to 2400-2385 levels.