Expect Crude to trade with a negative bias today: Angel

Crude Oil: Nymex crude oil prices declined more than 3 percent yesterday on the back of unfavorable economic data from the US, which led to expectations of reduction in fuel demand. Additionally, strength in the DX also exerted downside pressure on crude oil prices. It touched an intra-day low of $87.27/bbl and closed at $87.82/bbl in yesterday’s trading session. On the domestic front, prices declined by 2.6 percent and closed at Rs.4,962/bbl after touching an intra-day low of Rs.4,952/bbl on Wednesday. However, further downside was cushioned on the back of depreciation in the Indian Rupee.

API Inventories Data
As per the American Petroleum Institute (API) report last night, US crude oil inventories declined unexpectedly by 0.3 million barrels to 385.90 million barrels for the week ending on 25th May 2012. Gasoline inventories increased 2.1 million barrels and whereas distillate inventories dropped 1.3 million barrels for the same week.

EIA Inventories Forecast
The US Energy Department (EIA) is scheduled to release its weekly inventories report today at 8:00pm IST and US crude oil inventories are expected to rise by 0.6 million barrels for the week ending on 25th May 2012. Gasoline stocks are expected to decline by 0.8 million barrels whereas distillate inventories are also expected to fall by 0.1 million barrels for the same period.

Outlook: From the intra-day perspective we expect crude oil prices to trade with a negative bias on account of expectations of rise in US crude oil inventories, slowdown in European and US economy along with a stronger dollar index.

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