How Crude Oil Reacts Today

Crude oil prices for the most active November expiry at the NYMEX contract managed to close in the green, though lower from the day’s high due to a political overhang in the US, which pressed the issues regarding the debt and budget. Additionally, prices were also weighed on by the reports which showed that the storm Karen’s intensity reduced, reducing the hit to the oil and gas platforms in the Golf coast.

WTI crude for the most active contract added 0.5% to $103.85 per barrel while the appreciation in the rupee pushed the local crude prices more than 1% lower to Rs 6386 per barrel at the MCX.

For the week as a whole, WTI oil faced high volatility with prices continuously trading higher and lower amongst a number of economic, political and commodity specific events during the period under review.

In major updates during the week, the pipeline company TransCanad are ported that it’s in the final stages of completing its 485 mile oil pipeline from Oklahoma to Texas by the end of this month. The Gulf Coast pipeline is expected to carry up to 700,000 barrels of oil per day and could expand to 830,000 bpd in the future. The update gave a strong boost to oil prices on the day of the announcement i.e Wednesday, as the same is likely to further relieve the supply-glut at the WTI delivery point in Cushing. Amongst other major developments for oil, the department of energy reported very high increase in the crude and gasoline stockpiles, though distillate supplies fell. The EIA said that crude stockpiles for the week ended September 27 jumped by 5.5 million barrels whereas gasoline supplies rose 3.5 million barrels, both more than double of analysts expectations. The official closure of the US summer driving season and high refinery runs from the US refinery lead to this very sharp increase in inventory levels. We feel that a similar kind of trend in the stock levels will continue in the coming weeks as the country has entered a lean period with regard to oil demand.

On the PVO side, Volumes and Open Interest at both the NYMEX and Brent platforms have witnessed little movement during the last week. While on one side, weekly volumes have remained stable at 1.126 million for the November contract, the next month’s reading has  improved by 9% to 0.58 million contracts. At the Brent though, volumes for both the November and December contract have fallen by 4.3% and 8.9% respectively. Open interest also recorded a small change for the two contracts, particularly at the WTI. The above data continues to suggest that the markets are awaiting major trigger points for future trading directions.

During early Asian trade today, the major equity indices are all trading on a negative note, with average losses in the range of 1% following the movement in the US equity futures market. In the non-agri commodities, trading is mostly in a range during the early Asian session today. Crude oil prices are trading weaker, taking negative cues from the news on Karen. Anadarko Petroleum Corp. and Louisiana Offshore Oil Port returned workers and will probably start tanker loading respectively as fears of a strike from the storm reduced. In the domestic space, the rupee has opened nearly flat, with the bias extending on the bullish side and may cap any major gains in local non-agri commodities due to the parity.

Overall, the markets might continue to trade in a range as traders await key triggers. During the day, we have the important Sentix investor confidence report for the EU region, which is likely to provide some support to the commodity prices in the afternoon session, including oil. Though broader on an intraday basis, the trend still stay ranged, with the bias modestly on the negative side.

BULLION:

Gold Projected High Range at 29245-29465

Gold Projected Low Range at 29336-29116

Gold Mcx Dec Resistance on Upside at 29340-29590-29840

Gold Mcx Dec Support on Low side at 29900-28710-28460

Gold Trend Deciding Point at 29150

Silver Projected High Range at 48399-48005

Silver Projected Low Range at 48396-47900

Silver Mcx Dec Resistance on Upside at 48602-49007-49412

Silver Mcx Dec Support on Low side at 47790-47383-46978

Silver Trend Deciding Point at 48195

BASE METALS:

Copper Projected High Range at 456-460

Copper Projected Low Range at 454-449

Copper Mcx Aug Resistance on Upside at 458-462-465

Copper Mcx Aug Support on Low side at 450-445-441

Copper Trend Deciding Point at 453

Nickle Projected High Range at 862-875

Nickle Projected Low Range at 852-839

Nickel Mcx Oct Resistance on Upside at 870-880-891

Nickel Mcx Oct Support on Low side at 843-827-816

Nickel Trend Deciding Point at 854

ENERGY:

Crude Projected High Range at 6409-6455

Crude Projected Low Range at 6410-6364

Crude Mcx Oct Resistance on Upside at 6432-6478-6523

Crude Mcx Oct Support on Low side at 6341-6296-6250

Crude Trend Deciding Point at 6387

Natural Gas Projected High Range at 218-220

Natural Gas Projected Low Range at 219-218

Natural Gas Mcx Oct Resistance on Upside at 219-221-223

Natural Gas Mcx Oct Support on Low side at 215-214-212

Natural Gas Trend Deciding Point at 217

Mentha Oil Projected High Range at 868-878

Mentha Oil Projected Low Range at 874-863

Mentha Oil Mcx Oct Resistance on Upside at 872-884-896

Mentha Oil Mcx Oct Support on Low side at 852-844-832

Mentha Oil Trend Deciding Point at 864

TODAY STOCK MARKET TIPS

SELL MENTHA OIL MCX SEP BELOW 858 SL 864 TGT 852

BUY NATURAL GAS MCX SEP ABOVE 217 SL 215.50 Tgt 218.50

ECONOMIC INDICATORS:

DATE TIME Region Indicator Period Survey Prior
07.10.2013 05:20 JN Official Reserve Assets Sep $1254.2B
07.10.2013 14:00 EC Sentix Investors Confidence Oct 9.3 6.5
07.10.2013 10/12 GE Whole Sale Price Index MoM Sep -0.60%
07.10.2013 10/12 US Construction Spending  MoM Aug 0.40% 0.60%
07.10.2013 10/12 US Change in Private Payrolls Sep 182K 152K
07.10.2013 10/12 US Change in Nonfarm Payrolls Sep 180K 169K
07.10.2013 10/12 US Factory Orders Aug 0.30% -2.40%
07.10.2013 10/12 US Unemployment Rate Sep 7.30% 7.30%
07.10.2013 10/12 US Change in Manf. Payrolls Sep 5K 14K

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