Crude Oil and Natural Gas Climb As Market Sentiment Turns Positive

Crude oil is trading at $94.12 gaining steadily since Friday immune to the problems in Cyprus. Cyprus and its institutional lenders have reached a bailout deal, according to reports citing European Union officials. As part of the agreement the country will impose a 40% haircut on Bank of Cyprus depositors holding more than 100,000 euros in their accounts. The deal will now be put to the Eurogroup in Brussels for approval. The weekend saw tense meetings between Cyprus and the Troika — the European Commission, the European Central Bank and the International Monetary Fund — to reach a deal before a Monday evening funding deadline. Early today the EU Finance Ministers will meet in Brussels for the official approval. Crude oil prices edged higher on Friday broadly found support from equity markets as investors mulled the possibility of a deal to bail out Cyprus. Money managers raised their net long U.S. crude futures and options positions in the week to March 19, the U.S. Commodity Futures Trading Commission said on Friday. Crude oil has gained 41 cents this morning. There is virtually no data in Asia or the eurozone today, and only second tier data due in the US, which might strengthen the US dollar.

Most of the Asian equities are trading on higher note along with other asset classes on optimism from ease of concern related to Cyprus bailout. The euro is trading up by more than 0.30% at 1.3031 levels and extending gains on oil prices. As we proceed for the day, we hold a positive stance for oil price movement on the back of above reasons.

Natural gas declined Friday on profit-booking, after prices failed to sustain above $4 per mmbtu. Gas prices are trading at $3.975 this morning with gains of more than 0.60% in the international market. Optimism in the global market has come from the approval of Cyprus bailout deal. This might be supporting gas to trade higher currently. However, from fundamental front, traders can expect gas prices to come under pressure on concern of lower demand as winter demand is likely to over very soon. According to MDA Weather services, the weather is expected to remain normal for the coming 6-10 days in the US The US drilling rig count slumped by 30 units during the week ended Mar. 22 reaching a total 1,746 rotary rigs working, as per Baker Hughes Inc. Although a stronger US dollar could weigh down the commodity after US data is released.