Expect Crude Oil to trade lower: Angel Commodities

• Indian Rupee depreciates more than 1 percent in today’s session.
• Spot silver prices decline around 2 percent today.
• US crude oil inventories are expected to increase by 2.2mb -EIA.

European markets traded on a negative note today on the back of unfavorable economic data from the region. Additionally, Federal Reserve policymakers have backed away from the need for another round of monetary stimulus as the US economy gradually improves. This also led to rise in risk aversion in the global markets.

As per the minutes released yesterday from the 13th March Fed policy meeting indicated that it will not go for further monetary stimulus unless the economic growth weakens or prices increase at a rate slower than its 2 percent target. Asian markets ended on a mixed note and US stock futures are trading in the red territory.

Spot gold prices declined by 0.8 percent till 4.30 pm IST today on the back of a stronger Dollar Index (DX). Weak market sentiments due to reduced expectations for further monetary stimulus from Fed also acted as a negative factor for prices. The yellow metal touched an intra-day low of $ 1628.94/oz and was trading at $ 1631.89/oz till 4:30pm IST today. On the MCX, prices declined by 0.9 percent and was hovering around Rs. 27,661/10 gms today till 4:30pm IST.

Taking cues from fall in gold prices and downside in base metals pack, spot silver prices declined sharply by 1.9 percent today. Additionally, a stronger dollar index and rise in risk aversion in the global markets also exerted downside pressure on prices. The white metal touched an intra-day low of $ 31.90/oz and was hovered around $ 32.0/oz today till 4:30pm IST. On the MCX, prices declined around by 1.9 percent and touched an intra-day low of Rs.56,410/kg till 4:30pm IST today.

The base metals complex traded lower on the LME today on the back of rise in risk aversion in the global markets due to reduced  expectations for further quantitative easing from Fed. Additionally, strength in the US dollar index also exerted downside pressure on metal prices. However, depreciation in the Indian Rupee cushioned sharp decline on the MCX today.

Nymex crude oil prices declined by 0.6 percent today on the back of expected rise in US crude oil inventories coupled with a stronger dollar index. Oil prices touched an intra-day low of $ 103.02/bbl and was trading at $ 103.35/bbl today till 4:30pm IST. On the MCX, prices declined by 0.1 percent and was hovering around Rs.5296/bbl today till 4:30pm IST.

The US Energy Department (EIA) is scheduled to release it weekly inventories report today at 8:00pm IST and US crude oil inventories is expected to rise by 2.2 million barrels for the week ending on 30th March 2012.

Outlook
In the evening session, we expect precious metals and base metals to trade with a negative bias today, on the back of strength in the dollar index coupled with weak sentiments in the global markets due to reduced expectations of further monetary stimulus from Fed.

We expect crude oil prices to trade lower in the evening session taking cues from expected of rise in US crude oil inventories and a stronger dollar.

US ADP non-farm employment change and ISM non-manufacturing PMI data is expected to be on a negative side today and if the data comes as expected then this will further lead to downside pressure in the commodity prices.

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