Crude Oil and Natural Gas Outlook - March 25, 2022 - Reliance Securities

Mr. Sriram Iyer, Senior Research Analyst at Reliance Securities

International oil prices slid 2% on Thursday after the European Union (EU) could not agree on a plan to boycott Russian oil and on reports that exports from Kazakhstan's Caspian Pipeline Consortium (CPC) terminal could partially resume.

Domestic crude oil futures ended weaker on Thursday, while Energy Index futures rose tracking Natural Gas futures.

Moreover, the United States and its allies, meanwhile, were discussing a possible further coordinated release of oil from storage to help calm oil markets.

Also weighing on crude prices was the dollar which continued to strengthen for the 4th time in five sessions.

Oil prices fell further after ICE increased margins for May Brent crude futures by 19% effective March 25, the third margin update this year.

Trading was volatile for both crude benchmarks and will continue to remain volatile.

Downside was capped after prices drew some support from the drop in U.S. crude in the Strategic Petroleum Reserve (SPR) to the lowest level since May 2002.

U.S. crude at the Cushing storage hub in Oklahoma fell in the week to March 22, traders said, referring to a report from data provider Genscape.

International oil prices fell marginally this early Friday morning in Asian trade as the United States and allies considered releasing more oil from storage to cool markets and as traders faced higher costs for trading benchmark Brent futures.

Technically, if WTI May trade above $ 113.20 level, it could continue its bullish momentum up to the resistance zone at $ 115.78-$119.23. A trade below could pull prices to the support zone at $ 109.75-$107.17.

Domestic crude oil prices could start marginally weaker this early Friday morning, tracking a negative start in the overseas prices.

Technically, if MCX Crude Oil April trade above 8690 level, it could continue its bullish momentum up to the resistance zone at 8835-9010. A trade below could pull prices to the support zone at 8515-8365.

U.S. Natural gas (NG) prices Natural gas prices rallied on Thursday following the Department of Energy's report on stockpiles.

Indian NG prices also ended stronger on Thursday, tracking overseas prices.

Natural gas in storage was 1,389 Bcf as of Friday, March 18, 2022, according to the EIA estimates. This represents a net decrease of 51 Bcf from the previous week.

The weather forecast shows mixed weather across the West Coast and Cooler than normal weather across the East Coast during the next 6-10 days.

LNG exports were stable in the latest week.

U.S. NG prices have started marginally weaker this early Friday morning in Asian trade.

Technically, if NG May contract trade above $5.310 level, it could continue its bullish momentum up to the resistance zone at $5.556-$5.710. However, a trade below could pull prices to the support zone at $5.155-$4.910.

Domestic NG prices could start marginally weaker this early Friday morning tracking a weak start in the overseas prices.

Technically, if MCX NG March contract trades above 406.05 level, it could continue its bullish momentum up to the resistance zone at 425.37-436.13. However, a trade below could pull prices to the support zone at 395.27-375.93.