Karvy suggests to remain on sell side in Natural Gas

Crude Oil: Currently, oil futures prices are hovering above $93.5/bbl. with a marginal gain in electronic platform. From fundamental prospective fall in crude oil inventory along with other petroleum stocks might continue to support the trend. As per National Hurricane center, hurricane season is active with presence of more than two tropical cyclone in Gulf Coast region. Thus, concern of supply disturbances may add positive point in oil prices. Asian equities market has reacted positively to the inflation data released from China, which indicates inflation is cooling down in a slower pace. Speculation of monetary easing in China is still there as lower rate in inflation reported fro the last month. Thus, expectation of monetary easing in second largest oil consumer of the world may keep oil prices on higher side in Asian session. Fall in Australia unemployment rate in the last month is also reflecting some optimism in the market.

The most awaited, Japan target rate remain unchanged at 0.10 percent and it refrained from providing stimulus at present moment which might appreciate the JPY as an immediate impact. This would therefore be keeping the dollar under stress and hence oil futures prices might be supported. Market is eyeing on US trade deficit data which is likely to contract further in July, may be due to lower import. Jobless claims in the last week is also expected to increase may weigh on oil prices in the evening session. So, trend is looking little upside in today's session.

Action Plan: Technically, prices are expected to trade in the range of Rs 5110-5260 in MCX platform.

Natural Gas: Currently, gas futures prices are trading at $2.914 MMBTU with a marginal loss of 0.20 percent in electronic platform. As per EIA, natural gas storage is expected to increase 30 BCF, higher than prior week; may have negative impact on gas prices. As per National Hurricane center, hurricane season is active with presence of more than two tropical cyclone in Gulf Coast region. Thus, concern of supply disturbances may add positive point in gas prices. From economic ground, rising import of LNG by third largest energy consumer Japan may support gas prices to remain on higher side, ahead of gas inventory data releases tonight.

Action Point: We suggest to remaining on selling side for the day.

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