'Crude oil to remain range-bound, supply growth for nat gas'

With the macroeconomic fears playing out its part,matched only by the opposing force of strong fundamentals, where supply shortfall exists, Crude Oil prices are expected to be

in a range-bound environment over the coming weeks, says Barclays.
“The oil markets gained ground this week, partly due to renewed hope for the European economy, while a fair share of supply side noise also helped buoy prices.” Barclays noted in a report.
In particular, Shell introduced a force majeure on Forcado loadings for the rest of the year (just when its Bonny Light export force majeure had come to an end), adding further geometry to the volatile nature of Nigerian output so far this year.

Further, strikes hit two OPEC suppliers – Nigeria and Kuwait – over the week (though the effect on the latter was limited and has now been resolved).

The Nigerian strikes are tangential to the increasing violence in the country that has escalated recently and makes prospects for oil supplies from the country more volatile.
This week also saw the release of the key agency reports (EIA, IEA, OPEC), which showed revisions of slightly lower demand numbers as well as lower estimates for non-OPEC supply, continuing to point towards a tight market.

Natural Gas
The gas directed rig count has surged to 935, the highest level since December 2010, suggesting that strong supply growth remains in the picture for natural gas.
Natural gas prices generally traded sideways throughout the week as the fundamental picture remains unchanged for the time being. The prompt contract inched up at the beginning of the week as the weather outlook turned somewhat cooler for the near term. However, the upward momentum did not last, and by the end of the week, prices came under pressure again.
Overall, the November contract fell 8 cents to $3.49/MMBtu (the closing price on Wednesday). Heating demand is expected to pick up significantly next week, yet it should remain lower than the seasonal norm.
The EIA weekly storage report showed another higher-than-consensus injection, narrowing further the storage deficit to last year’s level.
Coal
In case of coal, API2 and API4 shifted up higher across the curve, mostly following the larger energy complex. Despite flattening, forward curves have yet to move into backwardation, as some market participants expected, with the acceleration of winter restocking in mind. The M+1 contracts for the benchmarks remain quite weak, lacking support from fundamentals.

European port stocks remain ample, while the global supply chain generally looks rather healthy for the time being. Coal-burning generation in Germany has been rather limited due to the seasonally mild weather and ample power output from renewables.

This week, though Rhine River levels have shown marked improvement, utilities have thus far not drawn stocks from ARA using extra barges.

Even with the golden week holidays ending, Chinese buyers have yet to come back to provide a floor for API4, although Indian consumption should soon gather pace if prices fall to the right level.
Source: Commodity Online