Sure Shot Commodity Tips

Crude oil futures are trading below $88 mark in Asia electronic trades Monday following solid gains of 1% on Friday amid new hopes for progress on a deal for Greece and following the release of encouraging data out of Germany.

Light sweet crude futures for delivery in January are trading down 30 cents at $ 87.98 a barrel on the New York Mercantile Exchange. On Friday, it settled higher by 1% at $88.28 a barrel. On the week, it gained 1.3%, the third consecutive weekly advance.

Market sentiment improved after Greece’s Finance Minister said the International Monetary Fund had relaxed its debt-cutting target for the country, suggesting lenders were closer to a deal for a vital aid tranche to be paid. However, other sources involved in the talks cautioned that the funding gap was far bigger than Greece has suggested.

Investor confidence also strengthened after the German Institute for Economic Research earlier said that its index of business confidence improved to 101.4 in November from a reading of 100.0 the previous month, beating expectations for a decline to 99.5.

In the coming week, market participants will be focusing on Monday’s meeting of the euro group of finance ministers to discuss unlocking Greece’s next aid installment. Traders will also monitor developments surrounding the looming “fiscal cliff” in the U.S., approximately USD600 billion in automatic tax hikes and spending cuts due to come into effect on January 1.

MCX December crude oil futures may open today’s session near Rs 4900 levels with support around Rs 4870 and Rs 4830 levels.

Sure Shot Commodity Tips

The MCX Silver futures broke above Rs 61000 per kg levels today as a good amount of fresh buying helped the metal amid mostly positive movement in global risky assets. The US dollar slipped as US Congressional leaders met with President Barack Obama on Friday and said they would work to find common ground on taxes and spending. This boosted hopes that the world's largest economy would be successfully able to combat with the looming "fiscal cliff". Gains in other industrial commodities like Copper and Crude oil also boosted the metal. COMEX Silver futures are trading at $32.60, up 2.3 cents or 0.73% on the day.

Silver futures extended a downward run from its highs near $35 per ounce achieved in the first week of October 2012. LME Copper tested its two-month lows and kept Silver in tight ranges. Silver is linked directly to industrial activity and safe haven demand and a drop in copper is normally supposed to have a negative influence on the white metal. The commodity tested its two-month lows near $30 per ounce and closed at $32.37, up nearly 5% on the fortnight. The prices have been locked in a broad range of $30-35 per ounce over last few days and a break on the either side is needed for further direction.

Precious metals consultancy GFMS estimates that industrial demand for silver fell 6% in 2012, driven by weak economic growth in developed countries. Manufacturers continued to find ways to substitute cheaper raw materials in place of silver. Meanwhile, consumers have cut purchases of silverware and shifted away from costly precious metals in their jewelry purchases. The trend was partially offset by rising sales in emerging markets, particularly China, GFMS said. While the industrial demand dropped, silver mine supply rose for the 10th consecutive year in 2012, and is expected to total 797.0 million ounces, up 4.3% from 763.8 million ounces in 2011, according to the consultancy.

The white metal had neared $32.30 per ounce levels earlier in the session but edged up quite impressively thereafter, adding one full dollar during the day. The Asian equities added good gains following a near 1.5% surge in Japanese stocks while the European stocks are also up by nearly 1%. MCX Silver futures are trading at Rs 61038, up Rs 168 or 0.26% on the day. The open interest in the counter is up nearly 4% - indicating fresh buying.

MCX Natural Gas Tips

MCX Natural Gas futures are trading down in the early moves today, as the global prices linger in red, witnessing follow up selling after the correction in the last session. The US equity markets recorded a heavy sell off yesterday and pulled oil and metal counters in commodities along with it. The Dow dropped 300 points even as world stocks gained earlier in the day after Barack Obama won the second term of the US Presidency.
The Globex Natural gas futures for delivery in December failed to break above $3.60 levels for a second consecutive session and slipped in tune with US stocks and crude oil prices, which lost nearly 3%. The commodity now trades at US$ 3.550, down 2.8 cents per million British thermal units (mmbtu) or 0.78% on the day.

The US National Weather Service has noted in a recent update that a storm is expected to hit the Mid-Atlantic and Northeast US on Wednesday and Thursday, bringing cold weather to the region. Colder-than-normal winter temperatures increase the need for gas-fired electricity to heat homes, leading to a surge in demand for natural gas. The heating season from November through March is the peak demand period for US gas consumption. Markets are eying further updates on the same.

The overall undertone is expected to be lax amid bearish undertone in Asian stocks and a rally in the US dollar. The US weekly inventories data is to be released later on today. Total US gas supplies stood at 3.908 trillion cubic feet, an all-time record that surpasses the previous peak of 3.852 trillion cubic feet reached last November. Stocks are 3.6% above a year ago and 7.1% above the five-year average for the week.

The Natural Gas prices topped out at a 10-month high of $3.85 per mmbtu in end October 2012. The prices had dropped to a low near $3.50 per mmbtu in first week of November and broke above $3.60 levels earlier in the week. Sentiments look weak given the sell off in equities as traders re assess the gains in risky assets after the Obama win. MCX Natural Gas futures are trading at Rs 194.20, down Rs 1 per mmbtu on the day or 0.51%