Mr. Sriram Iyer, Senior Research Analyst at Reliance Securities
International oil prices fell on Wednesday after major global oil producers came to a compromise about supply and after U.S. data showed demand slacked off a bit in the most recent week.
Domestic crude prices also ended lower on Wednesday, tracking international prices.
Reuters reported Saudi Arabia and the United Arab Emirates (U.A.E.) have reached a compromise that should unlock an OPEC+ deal to boost global oil supplies.
However, the U.A.E. said that no deal has been reached yet and talks are ongoing.
The benchmarks fell more after U.S. government data showed implied gasoline demand declining considerably last week.
Gasoline stocks rose by 1 million barrels, compared with expectations for a 1.8 million-barrel drop.
Overall product supplied, a measure of demand, was 20.6 million bpd over the last four weeks.
The U.S. EIA said crude stockpiles declined by 7.9 million barrels in the week to July 9, far more than expectations for a decrease of 4.4 million barrels.
However, the drawdown was overshadowed by lagging gasoline demand.
International oil prices have started weaker this Thursday morning in Asian trade amid rumours of an OPEC+ deal and weak overall demand.
Technically, WTI Crude Oil has given correction from $74.00 levels and is trading on a negative note below $72.00 level indicating for Bearish Reversal in the counter. Support is at $71.50-$70.70 levels.
Domestic crude could start weaker this Thursday morning tracking international prices.
On the domestic front, MCX Crude Oil was unable to sustain above 5600 levels ended near 5450 levels indicating for Bearish momentum in the counter up to 5422-5385 levels. Resistance is at 5485-5515 levels.
NYMEX Natural gas prices ended weaker on Wednesday ahead of inventory report from the Department of Energy.
Domestic natural gas ended weaker on Wednesday, tracking overseas prices.
Expectations are for a 48 Bcf build in stockpiles.
According to a National Oceanic Atmospheric Administration (NOAA) report, the weather is expected to remain warmer than normal for the next 2-weeks, on the East and West Coast with cooler than normal weather in the South.
There is one tropical storm that has a 10% chance of turning into tropical cyclones according to a NOAA forecast in the next 48-hours.
U.S. Production declined in the latest week, while LNG Exports decline week over week and weighed on prices.
NYMEX Natural Gas prices have started flat this Thursday morning in Asian trade ahead of inventory data.
Technically, NYMEX Natural Gas could trade in a range of $3.550-$3.750 levels.
Domestic natural gas could start flat this Thursday morning, tracking overseas prices.
On the domestic front, MCX Natural Gas July holds a strong support near 271-268 levels. Resistance is at 275-278 levels.
Disclaimer: The recommendations, if any, made herein are expression of views and/or opinions and should not be deemed or construed to be neither advice for the purpose of purchase or sale of any security, derivatives or any other security through RSL nor any solicitation or offering of any investment /trading opportunity on behalf of the issuer(s) of the respective security(ies) referred to herein. These information / opinions / views are not meant to serve as a professional investment guide for the readers. No action is solicited based upon the information provided herein. Recipients should rely on information/data arising out of their own investigations. Readers are advised to seek independent professional advice and arrive at an informed trading/investment decision before executing any trades or making any investments. While due care has been taken to ensure that the disclosures and opinions given are fair and reasonable, none of the directors, employees, affiliates or representatives of RSL shall be liable for any direct, indirect, special, incidental, consequential, punitive or exemplary damages, including lost profits arising in any way whatsoever from the information / opinions / views contained herein.