Outlook on Crude oil, Natural Gas: Kotak Commodity

Kotak Commodity has come out with its report on Crude oil, Natural Gas.

Crude oil- MCX Crude may note some gains tracking cues from international exchange however upside may be limited. NYMEX crude has bounced back above $86/bbl level erasing some of the recent losses. Supporting crude oil prices is gains in Asian equity markets after better than expected US ISM non-manufacturing index. Also supporting prices is slight retreat in US dollar after recent rally and expectations that weekly inventory report may note a decline in US crude oil stocks. However uncertainty persists about major global economies, especially the US and Euro-zone and this will limit any major rally in crude oil prices. Trend in equity and currency markets will continue to be the key price determining factor for crude oil. Focus today will be on UK and German industrial production and US Beige book report. Apart from it, focus will be on EIA Short-term energy outlook and API's weekly inventory report. Support for MCX Crude Sept contract is seen at Rs.3865 while Resistance is seen at Rs.4015.

Natural Gas- MCX Natural gas may trade with a downward bias tracking cues from international exchange. NYMEX gas continues to hold below $4/mmBtu level weighed down by mixed weather forecasts and concerns about health of US economy. Also weighing on prices is expectations that production shut in the Gulf of Mexico will resume soon. However the downside in natural gas may be limited by continuing storm activity in the Atlantic. Focus today will be on EIA's short term energy outlook report which will reaffirm expectations of higher natural gas production in US. Support for MCX Natural gas Sept contract is seen at Rs.177 while Resistance is seen at Rs.184.

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