Keystone XL Pipe Line Linking Cushing, Commodity Intraday Tips

Crude oil for most active March expiry at the NYMEX fell moderately on Friday to close near the $96.65 per barrel mark tracking the sharp fall in the US equity indices and also aligning with the fact that oil prices jumped smartly during the earlier part of the week. The Indian markets though saw a nearly unchanged closing at Rs 6106 per barrel as our prices got the support of acute depreciation in the Rupee against the Dollar. For the week as a whole, WTI oil stepped up around 2.5% backed by strong winter season demand in the US and appended with the cues that the Keystone XL pipeline linking Cushing, to the US Gulf has started making deliveries.

Crude Oil got support out of last week’s news that important Keystone XL pipeline linking Cushing, i.e. the delivery point for WTI has began making deliveries to the US Gulf Coast. As per the statements from the company officials, it is estimated that oil flows through the pipeline would eventually rise toward its 700,000 barrel capacity as the year progresses. Increase in outflow from the WTI delivery point is good news for the commodity as it helps in easing the glut of storage into the area.

Crude oil price also took support of the ongoing winter season in the US which is pushing distillate demand higher. As per last week report, the US EIA said weekly crude oil inventories rose by 990,000 barrels for the week ended Jan 17 while gasoline stocks also rose by 2.1 million barrels. Distillate stocks on the other side slipped by 3.2 million barrels, better than expected and drove oil prices higher.

In today’s trade we are seeing a strong blow to the most equity indices in the Asia. Overall region al equities are trading down over 2% whereas Japanese Yen appreciated strongly to 102 per USD. Economic numbers released from Japan in the form of trade balance showed a trade deficit. However, other global currencies are calm as of now. The USD index is at 80.429, euro is trading at $1.3686 and the pound sterling is at $1.6500. From the economic data front, we have Germany IFO numbers which are expected to improve a tad and might show its impact on most of the asset classes to rebound for a while. Lately from the US we have new home sales which are expected to decline. We believe most part of the gains which can be seen during European session might fade in the US session.

In crude oil commodity, we would be watchful in today’s session as on one side prices are likely to get support out of their inherent fundamentals though if equities across the globe extend loses gains might remain limited. Nevertheless, overall we continue to hold our broad bullish bias into the commodity and recommend buying on declines for Intra-day for small targets

Commodity Intraday Tips

BUY CRUDE OIL MCX FEB ON DIPS NEAR 6060 SL 6010 TGT 6130

COMMODITY MARKET EVENTS FOR DAY TRADING: