COM: Crude oil gains 1.7%, Nat gas prices may decline
Oil prices gained 1.7% yesterday after the Institute for Supply Management-Chicago said its business barometer climbed to 56.1, the highest level since August 2008. China’s manufacturing growth held at the fastest pace in 18 months in November, aiding the rebound of the world’s third-largest economy. Easing concerns over a potential default in Dubai prompted the dollar to fall against higher-yielding currencies, bolstering the investment appeal of commodities including gold. Oil also climbed yesterday after two separate maritime incidents. Somali pirates captured the Greek-owned Maran Centaurus supertanker carrying 2 million barrels of crude oil to the U.S. Iran’s navy stopped a British yacht and detained the crew. These issues helped oil prices gain upside support.
Nymex Natural Gas January prices ended in the negative territory on Monday to close at $4.840/mmbtu mark. Natural gas prices on the NYMEX slumped sharply by 6.7% yesterday, its biggest one-day decline since 1st October. What affected prices yesterday was news that Murwa, a Qatari LNG tanker carried the first shipment to the US. The cargo was enough to heta about 9 million homes for a day and added to the largest inventories for this time of the year since 1994.
Natural gas prices could decline further as rising supplies threaten to hurt prices. The International Energy Agency also warned of a glut and that could be a bearish factor. U.S. imports of liquefied natural gas will rise 34 percent this year to about 470 billion cubic feet and another 40 percent in 2010. Global LNG supply will exceed demand for a second year in 2010 as new projects from Qatar to Peru boost output. Despite the winter season around we expect natural gas prices to fall and hover around $4.00/mmbtu levels in the short-term.
Today, we could witness sideways move in crude oil prices with support for NYMEX January Crude Oil is seen at $75.65/$73.95 level & resistance at $78.50/$79.70 levels.
Natural gas price will take cues from oil prices. Natural gas MCX December contract has major support at Rs. 214 & resistance at Rs.240 levels.
