Crude Oil and Natural Gas Outlook

The euro was poised for the biggest monthly decline since September, before a sale of Italian debt tomorrow and data this week forecast to confirm that the prolonged debt crisis is hurting the region’s economy. The 17-nation currency was 0.2 percent from the lowest since July 2010 after yield premiums on Spain’s securities over Germany’s rose to the most in 17 years. Italy is scheduled to sell 3.5 billion Euros ($4.4 billion) of five-year notes and 2.75 billion Euros of 10-year.

Oil rose for a third day in New York as speculation that U.S. economic growth will boost fuel demand in the world’s biggest crude consumer countered concern Europe’s debt crisis will worsen. Crude for July delivery climbed as much as $1.13 to $91.99 a barrel. WTI Crude Oil is currently trading at $91.20 per barrel.

This morning in early Asian session, WTI oil futures prices are trading above $91/bbl with gain of more than 0.40 in electronic platform. Oil prices continued the positive trend by taking cues from higher trading Asian equities and speculation of US economic growth. Most of the Asian equities are opened on higher note with optimism from Greek support for Pro-austerity parties. Other side, concern from Spain’s banking sector is weighing on the seventeen nation currency Euro, which is trading below 1.252 levels with fall of more than 0.10 percent.  Spain’s borrowing cost for 10 year’s increased by 7 percent and the risk premium of Spanish Government bond over German bond climbed up .Thus, the euro is likely to be under pressure which may limit the gains in oil futures prices. From economic front, German’s import price index is likely to fall for the month of April which may reflect on lower CPI in May month. Thus, Euro may gain some points during European session. Likewise, from US consumer confidence level reading is expected to increase. Rise in manufacturing activities in May come with higher number for Dallas Fed Manufacturing index. Thus, oil prices may trade on higher side on the back of positive economic data expectation. As per National Hurricane Centre, tropical storm Beryl dissipated and became tropical depression. Thus, concern of supply disruption declined in Gulf areas, which may also limit the gains in oil prices. Overall, price trend looks upside with limited gains.

Natural Gas futures prices are trading below $2.561/mmbtu with fall of more than 2.5 percent in electronic trading. We may expect gas futures prices to remain under pressure throughout the day on concern from declining consumption pattern by US consumer. As per National Hurricane Centre, tropical storm Beryl dissipated and became tropical depression. Thus, concern of supply disruption declined in Gulf areas, which may also limit the gains in gas prices. Beginning of summer season may drive higher demand for Gasoline for summer driving demand which may weigh on the natural gas prices.

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