Initial Jobless Claims and Commodity Tips

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Initial Jobless Claims and Commodity Tips
Crude oil prices finished on a highly
weaker note yesterday, extending its losses
for almost all of the week. Oil prices
declined on anticipation of a subdued
inventory report from the US, whereas later
developments and comments from the US government
about the release of some Strategic Petroleum
Reserves also added weight to the commodity. At
close, WTI crude for the April expiry at the
NYMEX was near 98 per barrel, lower by around 2
for the day. In the Indian markets, the MCX crude
too saw a huge fall, with the commodity finished
down by around 2.5, firmly below 6000. The
higher fall locally was led by anticipation of
appreciation in the rupee on Friday post the
release of better data locally. While the NYMEX
oil fell due to its inherent weakness, Brent also
extended its losses, though it was a better
performer against its US based peer. At close,
Brent oil for the April expiry at ICE was lower
by 0.5 to 108 per barrel. The international
benchmark managed to increase its premium against
the WTI to 10 a barrel. Against the major
commodity related cues, the US EIA in its weekly
inventory report said crude stocks jumped by 6.2
million barrels for the week ended March 7,
nearly three time market expectations. Total
crude stocks hit near 370 million barrels,
its highest levels since December last
year. While some positivity came in the
form of a huge fall in gasoline
inventories, which declined by over 5
million barrels, the closely watched
distillate stockpiles fell lower than
expected. Refinery utilization too declined by
1.4 and affected the broader movement in the
commodity. However, it should be noted that we
have already talked about a fall in refinery
runs, as this is usually the lean demand period
and US based refineries carry out seasonal
maintenance. The other aspect which added fuel
to the selling pressure was reports that the US
Energy Department would release 5 million barrels
of oil from its Strategic Petroleum Reserve (SPR)
on a test basis. While the markets are
speculating that this could be a process
against any unexpected concerns arising in
Eurasia, the US government officials denied
the same and described the release as a
"test sale" to evaluate how the reserve system
works to release and sell the oil. In the early
morning trade, the commodity has opened
moderately positive and is currently adding near
0.35 to 98.30 per barrel. While the markets
would finally see some important data today, the
data from China on Industrial production would be
watched closely. We also have some important
numbers from the US due this evening. Overall
though, the inherent fundamentals for the
commodity continue to be weak and we are
maintaining our bearish bias on the
commodity. We recommend initiating fresh
selling on pull-backs. We are likely to see a
moderately positive opening in MCX crude, mainly
due to gains in the NYMEX in early trade
today Global market analysis Crude oil fell
huge post the weekly petroleum inventory number,
which showed a rise in stockpiles. Another factor
that is likely to pull oil prices further lower
is the US' announcing a test sale of oil from the
strategic petroleum reserves (SPR). We reiterate
two scenarios here, either the US is running the
test to use its own oil or the sanction on
Ukraine could be a trigger. Nonetheless, oil
continues to be bearish and this morning, it is
trading at 98.31. We continue to hold a bearish
view on the same. However, equities trading
moderately higher might arrest the fall. We
look to selling the commodity on pullbacks.
Natural gas fell greatly last night and is now
trading at 4.470 and looks like it may fall
further in the near-term and so, we recommend
selling on every rise. From the economic data
front, we have China's industrial production
number, a key data to watch how the Asian and
European markets would react. We also have the US
retail sales, jobless claims and the business
inventories number. Commodity Tips SELL CRUDE
OIL MCX MAR ON RISE NEAR 6045 SL 6120 TGT
5960 Today Economic Data Indicators
DATE 13.03.14 TIME 1300 Region CH Indicator Industrial Production YTD YoY Period Feb Survey 9.5 Prior 9.7
13.03.14 1800 EC ECB Publishes Monthly Report --- ---- ----
13.03.14 1800 US Retail Sales Advance MoM Feb 0.2 -0.4
13.03.14 1800 US Retail Sales Ex Auto MoM Feb 0.5 0.0
13.03.14 1800 US Initial Jobless Claims 39508 --- 323K
13.03.14 1800 US Continuing Claims 46784 --- 2970K
13.03.14 1800 US Import Price Index MoM Feb 0.6 0.1
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