Commodity Research Desk Energy Insight Monday, 10 November 2014 Crude Oil: Technical Recommendation Exchange Contract S2 S1 PCP R1 R2 Recommendation Crude NYMEX Dec-14 77.2 77.9 78.65 79.3 79.9 Sell at 79.30-79.40 TP 77.50 SL 80.20 Crude Oil MCX Nov-14 4769 4812 4861.0 4894 4924 Sell at 4893-4895 TP 4840/4790 SL 4950 Review  Crude oil priced once again saw good slide in major international benchmarks with the WTI for active December contract slipping by around 2% last week to $78.50 per barrel mark as markets took broader supply related issues, notwithstanding the surprisingly better inventory number from the US.  Brent crude on the other side was headed for a seventh continuous weekly drop, falling to $83.50 per barrel and weaker by 2.5% mark this week. The commodity was moving towards its longest strike of weekly loss since Nov 2001 as OPEC came out with long-term demand supply estimates which were lowered due to US shale boom. Outlook: In intraday, there are no major fresh cues to be watched on though mixed equity factors, no major data due in the latter half could keep the commodity in a ranged manner today. We feel, crude could gradually come under pressure wherein traders need to specifically watch the Brent today as markets sources are suggesting that Libya would probably start its Sharara field today and may act moderately negative on oil. Last week we have seen decent pullback in prices from the lows of the week as better US inventory number drove oil especially the WTI higher Nevertheless, the commodity still remained subdued looking at the cumulative aspects about oil global demand–supply. Same aspect can be checked from the fact that WTI futures contract moved into contango position during the week and was almost evenly balanced as per the rate for Dec-Jan month contract goes. On a weekly closing basis WTI active calendar spread had backwardation of just around 5 cents, its weakest in at-least this year and depicting weakness about immediate demand. We recommend selling the commodity on higher levels today. Backwardation between active WTI Dec-Jan contract remained at multi-month lows near 5 cents currently Global Market Snapshot: Today morning Asian equity markets are trading on a mixed note with weaker Chinese PPI number and mixed closing in US markets hurting the trading direction post the subdued headline Non-farm payrolls data which showed an Job addition by 214000 against expectations of a number near 230000235000. The USDX is losing modest weight in early morning session hovering near the 87.50 mark whereas other major currencies were marginally in the green. In Major data today morning, China’s factory-gate prices or the PPI fell for a record 32nd month in October and CPI remained subdued raising pressure on policymakers to bolster the world’s second-largest economy as disinflation spreads. The producer-price index dropped 2.2% on a YoY comparison, Bloomberg data showed. CFTC Data too depict overall weakness continuing: Money managers reduced net-long positions in WTI by 8% in the week ended Nov 4, US CFTC data show. Long positions retreated to the least since May 2013 while short holdings rose. Energy Insight: A comprehensive daily Mail Us at [email protected] E= Energy Insight Derivative Analysis: 160000 5300 MCX- Crude oil PVO 140000 5200 5100 120000 5000 Rs/Bbl 100000 4900 80000 4800 60000 4700 40000 4600 20000 4500 0 4400 O pen Inter est Volume 500000 450000 400000 350000 300000 250000 200000 150000 100000 50000 0 Pr ice 86 NYMEX -Crude oil PVO 84 82 l b B / $ 80 78 76 74 72 O pen inter est Volume Pr ice Spread Analysis: NYMEX-Crude oil (Dec-Jan) 35 0.1 0 30 -0.1 25 l b20 B / s15 R -0.2 l b B-0.3 / $ -0.4 MCX-Crude oil (Nov-Dec) 10 -0.5 5 -0.6 0 -0.7 Major Economic Data Today: Date Time Country/Region Event Period Surv(M) 11/10/14 07:00 CH 11/10/14 07:00 PPI YoY Oct -2.0% -1.8% CH CPI YoY Oct 1.6% 1.6% 11/10/14 15:00 UK Lloyds Employment Confidence Oct -- 10.0 11/10/14 15:00 EC Sentix Investor Confidence Nov -- -13.7 11/10/14 20:30 US Labor Market Conditions Index Oct -- 11/10/14-11/17/14 IN Exports YoY Oct -- 2.7% 11/10/14-11/17/14 IN Imports YoY Oct -- 26.0% 11/10/14-11/15/14 CH New Yuan Loans Oct 615.0B 857.2B 11/10/14-11/15/14 CH Aggregate Financing RMB Oct 880.0B 1050.0B 11/10/14-11/12/14 IN Local Car Sales Oct -- Energy Insight: A comprehensive daily Prior -- Mail Us at [email protected] 154882.0 E= Energy Insight Natural Gas Technical Recommendations Exchange Contract S2 S1 PCP R1 R2 Recommendation NG - NYMEX Dec-14 4.253 4.328 4.412 4.484 4.549 Trading range 4.570-4.440 NG - MCX Nov-14 264.2 269.0 274.4 277.8 281.0 Trading range 273-286 Review:   US CPC: 6-10 Day Temperature Outlook (Fresh View) Natural gas advanced around 53 cents, or 14% during the past week to $4.41 per MMBTU mark during as winter snap in larger part of the US bolstered the case for increasing heating demand in the country. At the MCX, active, Nov contract too jumped 14.4% to Rs 274 per MMBTU, producing its best weekly returns since Fed this year. Outlook: As per latest developments over weather, a cold front from Canada will sweep across most of the lower 48 states over the next two weeks, according to Commodity Weather Group LLC in Maryland, which predicts the coldest November since 2000. The cold blast will be most intense in the Midwest, East and South wherein heating degree days are seen expanding across most part of the country. We maintain our broad bullish bias though recommend fresh longs only on dips. Today morning, NG is higher by around 2.5% and thus we once again should see gap-up opening locally. Derivative Analysis: 90000 Natural Gas-MCX PVO 80000 70000 60000 290 300000 270 250000 250 50000 230 40000 30000 210 20000 10000 0 u t b m M / s R 4.5 4.3 200000 4.1 3.9 150000 3.7 100000 190 50000 170 0 3.5 3.3 3.1 2.9 O pen inter est O pen inter est Volume 4.7 Natural Gas-NYMEX PVO Volume Pr ice Pr ice Spread Analysis: NYMEX-Natural Gas (Dec-Jan) 0.11 0.10 0.09 u t b0.08 m M0.07 / $ 0.06 0.05 0.04 Energy Insight: A comprehensive daily 9.00 8.00 MCX -Natural gas (Nov-Dec) 7.00 u t 6.00 b 5.00 m M ./4.00 s R3.00 2.00 1.00 0.00 Mail Us at [email protected] u t b m M / $ E= Energy Insight Prepared By: Function Analyst Head of Research-Commodity & Currency Aurobinda Prasad Fundamental Analyst Tapan Trivedi Technical Analyst Ramesh Chenchala To unsubscribe please mail us at [email protected] Disclaimer The report contains the opinions of the author, which are not to be construed as investment advices. 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