Crude oil prices in the US followed a mercurial path during trade yesterday with the commodity fell in the Asian and early European session though gained in the other half to finish nearly a percent higher for the day. By the closing time, WTI Crude for January expiry stood 0.9% up at $97.50 per barrel wherein in India, appreciation in the Indian Rupee pushed prices lower, with a loss of 0.15% to Rs 6027 per barrel.
Amongst important cues for the commodity today and tomorrow, the private sector API and the government backed DoE would release their weekly inventory report for the week ended 13th Dec. As per markets estimates, crude stocks are expected to have fallen by 3.25 million barrels to near 372 million last week. Fall in inventories continued for a third week as refiners continued operating at higher rates ahead of the peak winter demand and also backed by issues respect to year-end tax burdens. We feel there is a higher chance for a fall in stocks though amidst no major change in demand currently, most of the drop in crude stocks would be compensated with the rise in product related inventories i.e. distillate and gasoline.
In other global commodity related cues, while the WTI for January delivery advanced around 0.9% yesterday, the other benchmark the ICE Brent for February settlement gained more than 1.5% to finish near the $110.50 per barrel mark. Brent rose higher than WTI amidst failed talks between rebel groups and the government in Libya to reopen some ports in the country. The Brent increased its premium over WTI to near $12 per barrel.
Amongst the global market cues, the possibility of the US tapering its stimulus has increased. The FOMC meeting is scheduled today and tomorrow in the US wherein the outcome would be released on 18th. Assets across the globe are steady and waiting to see the stance to be taken by the Fed. By looking at the economic data released in the recent past in the US, possibly of the Fed to narrow its bond buying activities have increased. However, we believe the phase could be minimal while Fed may continue to reiterate its stance on lower interest rates in the future. Until the results are out we may spot a very narrow trading sessions across assets while there could be very awkward price movements. From economic data front we have loads from UK, Euro-zone and in the US while inflation numbers could be highly influential.
For Crude, WTI futures are little changed currently wherein we believe markets may remain sideways while there might be slight buying for intraday. While the Rupee has opened modestly lower today, we feel it could continue to trade on a weaker note mainly ahead of the RBI monetary policy meeting tomorrow and also support our positive case for Crude in Intra-day.
BUY CRUDE OIL MCX DEC ABOVE 6045 SL 6026 TGT 6081
BUY NATURAL GAS MCX DEC ABOVE 268 SL 264 TGT 272
TODAY COMMODITY MARKET ECONOMIC EVENTS:
| DATE | TIME | Region | Event of the Day | Period | Survey | Prior |
| 17.12.13 | 15:00 | UK | PPI Input NSA MoM | Nov | -0.6% | -0.6% |
| 17.12.13 | 15:00 | UK | CPI MoM | Nov | 0.2% | 0.1% |
| 17.12.13 | 15:00 | UK | Retail Price Index | Nov | — | 251.90 |
| 17.12.13 | 15:30 | EC | ZEW Survey Expectations | Dec | — | 60.20 |
| 17.12.13 | 15:30 | GE | ZEW Survey Current Sit. | Dec | 30.00 | 28.70 |
| 17.12.13 | 15:30 | GE | ZEW Survey Expectations | Dec | 55.00 | 54.60 |
| 17.12.13 | 15:30 | EC | CPI MoM | Nov | -0.1% | -0.1% |
| 17.12.13 | 15:30 | EC | CPI YoY | Nov F | 0.9% | 0.9% |
| 17.12.13 | 19:00 | US | CPI MoM | Nov | 0.1% | -0.1% |
| 17.12.13 | 19:00 | US | Current Acc. Balance | 3Q | -$100.9B | -$98.9B |
| 17.12.13 | 19:00 | US | CPI YoY | Nov | 1.3% | 1.0% |
| 17.12.13 | 20:30 | US | NAHB Hou. Market Index | Dec | 55.00 | 54.00 |
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