Housing Price Index and Commodity Trading Tips

Crude oil prices in the US recorded strong gains on Monday with the WTI April expiry contract rise nearly 0.6% to close near the $103 per barrel mark. Oil inched higher amidst market talks about a strong winter storm is set to trek across the US in the current week and lifted the expectations that the demand for the commodity could rise further. By the end of trade, WTI stood $102.80 per barrel level. In the Indian markets we saw crude prices gaining by a similar percentage and finished at Rs 6400 mark.

The other major global benchmark i.e. the ICE Brent also added decent weight yesterday and touched its highest level in 2014 firmly above the $110 per barrel mark. Brent jumped after fresh concerns over supply coming in from Libya along with South Sudan and Venezuela to an extent. At close on Monday, Brent crude for April settlement added 0.7% to finish near the $110.65 a barrel level. As per a fresh news update, oil output in Libya has fallen down to 230,000 barrels a day against 570,000 barrels a day in early January.

For the US there are no major updates with regards to the commodity other than the market expectations over the weekly inventory report from the Department of Energy. While we are not expecting any fireworks as per the crude demand scenario is concerned, stocks at Cushing are seen extending their fall which has been the trend over the past three weeks. Cushing stocks have fallen by around 6 million barrels in the last three weeks ending February 14, touching its lowest level since October last year.

On other major broader cues, we have seen yesterday a big fall in Natural gas i.e. other key energy commodity tracked in the winter season. The commodity at NYMEX fell around 11% marking its biggest decline in nearly 6 years as traders started to unwind their positions after a stellar rally in last couple of weeks and on comments that cold weather could start receding in coming week’s time in the US.

Overall we are having a ranged view in the commodity and feel traders are awaiting major trigger points over the next few trading sessions. While the inventory data could pose a risk to our view, we have a bearish bias into the commodity tracking the fresh updates on short-term weather scenario from the US Climate prediction centre. We recommend selling on pull-backs into the commodity from higher levels for the day

Global market analysis: The US market posted a higher close overnight so the impression is felt on Asia this morning. Asian markets are trading with an average gain over half per cent. USD index traded marginally lower at 80.20 while the euro currency advanced to $1.3740 and Japanese Yen weakened to 102.54.

Coming to crude oil, WTI April futures traded volatile while eventually it posted a higher close. This morning however, it is trading marginally lower at $102.46. We believe oil is currently stabilizing while it is seeking for any fresh triggers. Looking at the inventory numbers in the US that is planning out tomorrow shows both gasoline and distillates are falling huge while the crude stocks are likely to rise a tad. We perceive this data might have a positive impact on oil. Natural gas eventually showed its precarious move and it fell over 11%. We believe this is an absolute profit booking phase for the commodity ahead of expiry while we believe now the weakness may prolong on today’s trading session.

Economic data: GE GDP, EX-IM, US house price index, consumer confidence, Richmond fed manufacturing index.

Commodity Trading Tips

SELL SOYABEAN NCDEX MARCH BELOW 4032 SL 4056 TGT 4010-3090

SELL CRUDE OIL MCX MAR NEAR 6385-6395 SL 6440 TGT 6335-6320

SELL SILVER MCX MAR BELOW 47800 SL 48050 TGT 47450

Today Economic Data Indicators: