Crude Oil Down Natural Gas Up In Early Session

This morning, crude oil prices are trading at $92.61 with marginal gains from yesterday’s closing. This might be a technical correction on oil prices. Organization of Petroleum Exporting countries (OPEC) which accounts for 40% of total world oil production is expected to reduce oil shipments by 40000 barrels to 23.72 million barrels per day for the weeks ending in April 6. This should support downside movement in oil prices as demand from major oil consumers are weakening. Market dynamics such as the persisting concerns related to Cyprus bailout is expected to keep the shared currency under pressure in today’s session extending weakness to oil. Germany IFO numbers for March are due for releases today which are expected to improve in a slower pace. Yesterday’s disappointing eurozone, French and German PMI data continue to weigh on the commodity, with numbers showing continued contraction in manufacturing demand for energy products lessens. Although Chinese HSBC data supported an increase in prices early yesterday. However, traders cannot expect oil prices to take positive cues out of this. There are no economic releases scheduled from the US today. Speculators can expect market to stay cautious and steady in last day of the week. As the intrinsic fundamentals remain weak, traders might want to look to the downside.

There were local and regional fundamental reports that weighed on prices, including a report that showed that China’s commercial crude inventories were down 2.9 percent by the end of February versus a month earlier, while refined fuel stocks rose 6 percent over the month, the official Xinhua News Agency said in a newsletter on Friday.  China’s crude oil imports from Iran rebounded last month from a 10-month low hit in January, official data showed. China, Iran’s top crude oil customer, bought nearly 2.0 million tons of Iranian crude in February, equivalent to about 521,330 barrels per day (bpd), up 68 percent from 309,906 bpd in January, according to data from the General Administration of Customs

Sudan has ordered oil firms to prepare to start receiving South Sudanese crude exports again, state media reported on Thursday, after the two countries signed a deal this month to restart output.

WTI Crude oil futures ended in negative territory, as Cyprus issue overshadowed healthy macroeconomic numbers in US. In US, Philadelphia Fed Manufacturing Index picked up sharply in March, while existing‐home sales recorded 0.8% increase in February to a seasonally adjusted annual rate of 4.98mn, its highest since November 2009.

Natural gas  jumped above $4 mark yesterday but failed to sustain and declined, following a weekly report on US supplies that showed a smaller drop in stockpiles than traders had expected. Natural gas stockpiles fell by 62bn cubic feet in the week ended March 15, as per EIA report. Traders sold off to book profits instantly when price broke the $4 price, triggering automatic sell orders. Gas is regaining momentum this morning adding over 2 cents to trade at 3.947.