Commodity Research Desk Energy Insight Monday, 19 January 2015 Crude Oil: Technical Recommendation Exchange Contract S2 S1 PCP R1 R2 Recommendation NYMEX Feb-15 46.5 47.7 49.13 49.9 50.6 Trading range 50.50-47.50 MCX Jan-15 2927 2971 3021 3054 3085 Trading range 2970- 3150 Review (Weekly)  Crude oil commodity recorded high volatility this week though broadly stayed weaker. The commodity as of weekly closing stood little changed near the $49 per barrel at the WTI for March expiry contract.  Commodity at the other major benchmark Brent too skid lower with pace of fall further higher to over 2% to $50 per barrel.  No doubt, expiry week drove increase in volumes and OI in March contract at NYMEX/ICE while similar impact was seen for MCX Feb contract for oil. Outlook: Crude oil once again registered good losses as of the end of the week as supply related problems continued. While volatility in the commodity has intensified in recent session as prices trade near multi-year lows prompting comments from oil producers and major countries though bias continues to stay on the lower side. Crude oil fell today morning with WTI Mar losing nearly 0.75% as fresh reports showed Iraq increased its crude output and further plans to extend output in latter half of this year, notwithstanding the supply surplus. Last week, we said, OPEC as a group in a report said demand for its oil would average 28.8 MBPD, the lowest in 12 years in 2015. Oil prices have continued to trade down in last seven months on supply related problems with market surplus currently standing in the range of 1.8 MBPD to 2 MBPD as per different forecasts wherein demand too have taken a beating. On top of that, Iraq Oil Minister during weeked said average Iraqi output currently stands at 4 MBPD, higher end of its range in last few montsh. Overall w believe volatility in the commodity may conitue in the coming week, however we hold selling in the commodity from higher levels today. Energy Insight: A comprehensive daily WTI Crude Oil March contract depicting very high volatility in last few trading sessions Global Markets Snapshot: US equity markets finished on a positive note on Friday with gains of more than 1% after its consumer confidence data showed reading jumped to a 11 year high. Asian equity markets are trading on mixed to positive note however Chinese equities were losing around 6% as per last quote following the suspension of 3 biggest brokers. China suspended three of the nation’s biggest brokerages from adding margin-finance and securities lending accounts following rule violations. In currencies, US dollar index was moderately higher adding towards 92.66 mark whereas Euro continued to have a volatile to weaker session and traded near the 1.1550 mark. While we don’t have any major economic data today and also select US commodity and others asset classes are shut amidst Martin Luther Jr. King’s holiday; probably overall movement may remain shallow. Mail Us at [email protected] E= Energy Insight Derivative Analysis: 300000 4000 MCX- Crude oil PVO 3500 250000 3000 200000 Rs/Bbl 2500 150000 2000 1500 100000 1000 50000 500 0 600000 50 400000 40 300000 30 200000 20 100000 0 Op en In terest Vo lu m e 60 NYMEX -Crude oil PVO 500000 10 0 P rice 0 Op en in terest Vo lu m e P rice Spread Analysis: NYMEX-Crude oil (Feb-Mar) 0.8 0.7 0.6 0.5 l b B0.4 / $ 0.3 0.2 80 70 60 l 50 b B40 / s R30 20 10 0 MCX-Crude oil (Jan-Feb) 0.1 0 Economic Data Today: Date Time Country/Region Event Period Surv(M) 01/19/15 10:00 JN Industrial Production MoM Nov F -- -0.6% 01/19/15 10:00 JN Industrial Production YoY Nov F -- -3.8% 01/19/15 10:00 JN Capacity Utilization MoM Nov -- 0.7% 01/19/15 10:30 JN Consumer Confidence Index Dec 38.5 37.7 01/19/15 11:00 JN Nationwide Dept Sales YoY Dec -- -1.0% 01/19/15 14:30 EC ECB Current Account SA Nov -- 20.5B 01/19/15 14:30 EC Current Account NSA Nov -- 30.6B 01/19/15 15:30 EC Construction Output MoM Nov -- 1.3% 01/19/15 15:30 EC Construction Output YoY Nov -- 1.4% Energy Insight: A comprehensive daily Prior Mail Us at [email protected] l b B / $ E= Energy Insight Natural Gas Technical Recommendations Exchange Contract S2 S1 PCP R1 R2 Recommendation NYMEX Feb-15 2.984 3.052 3.127 3.202 3.269 Buy at 2.988-2.986 TP 3.040 SL 2.940 MCX Jan-15 184.4 188.4 192.8 197.5 201.7 Buy at 184.50-184.30 TP 186 SL 181 Review: (Weekly)    US CPC: 8-14 Day Temp Outlook (Prior Day) Natural Gas Feb contract at NYMEX had a very strong week wit with the commodity rising over 6% on back of some forecasts of changes in weather in the US. NG NYMEX contract rose 6.1% to $3.12 per MMBTU though volatility during the week stayed higher. NG for Jan expiry contract at MCX too gained nearly 5% to Rs 192 per MMBTU. Outlook: Natural gas prices rose heavily last week on expectations of some arctic blast in parts of the US whereas inventory numbers too stood highly positive. Inventory numbers showed the NG stocks fell by 236 BCF for week ended Jan 9, better than forecasts of a number near 229 BCF while supporting prices. As of early morning session in electronic markets though NG is losing around 4%. While select markets in the US remain closed today and weather not depicting any major change , we hold cautious view in NG today. US CPC: 8-14 Day Temp Outlook (Latest View) Derivative Analysis: 100000 90000 80000 70000 60000 50000 40000 30000 20000 10000 0 250000 210 Natural Gas-MCX PVO 205 200 195 190 185 u t b m M / s R 180 3.25 3.2 3.15 150000 3.1 100000 3.05 2.95 0 170 2.9 Op en in terest Vo lu m e u t b m M / $ 3 50000 175 Op en in terest 3.3 Natural Gas-NYMEX PVO 200000 Vo lu m e P rice P rice 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. The author, directors and other employees of Karvy and its affiliates cannot be held responsible for the accuracy of the information presented herein or for the results of the positions taken based on the opinions expressed above. 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