Crude oil gains as US inventories decline
A decline in crude oil stocks indicates demand for the energy commodity
Updated – June 28, 2023 at 10:42 AM. | Mangaluru, June 28
Crude oil futures traded higher on Wednesday morning as an industry report from the US showed a decline in crude oil inventories in that country.
At 9.55 am on Wednesday, September Brent oil futures were at $72.91, up by 0.55 per cent, and August crude oil futures on WTI (West Texas Intermediate) were at $68.07, up by 0.55 per cent.
July crude oil futures were trading at ₹5,610 on the Multi Commodity Exchange (MCX) during initial trading, against the previous close of ₹5,617, down by 0.17 per cent, and August futures were trading at ₹5,646, as against the previous close of ₹5658, down by 0.21 per cent.
Official data today
According to the industry body American Petroleum Institute (API), crude oil inventories in the US declined by 2.40 million barrels for the week ending June 23, against a decline of 1.24 million barrels in the previous week. A decline in inventories indicates demand for the commodity in that market. The US is a major consumer of crude oil in the global market. However, official data from the US EIA (Energy Information Administration) is expected later in the day.
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The above data assumes significance following fears of political instability in Russia, which is a major producer of crude oil in the global market. During the last week-end, Russia’s W----r (a private military group) raised the flag of rebellion, raising concerns about political stability in Russia. However, the rebellion fizzled out quickly, after the group and the Russian government called a truce. Russia is already in a war with U-----e.
Any instabilities in Russia will have a significant impact on the global crude oil market as it supplies significant quantities to Asian markets such as China and India.
Meanwhile, the market will follow closely US Fed Reserve Chairman Jerome Powell and European Central Bank (ECB) President Christine Lagarde’s comments at an ECB event later in the day for hints about the future interest rate outlook in these economies. Any increase in interest rates impacts the price of commodities such as crude oil.
Guarseed, turmeric gleam
July zinc futures were trading at ₹213.20 on the MCX, against the previous close of ₹214.20, down by 0.47 per cent.
On the National Commodities and Derivatives Exchange (NCDEX), July guarseed contracts were trading at ₹5,367, against the previous close of ₹5,317, up by 0.94 per cent.
August turmeric (farmer polished) futures were trading at ₹9,462 on NCDEX, against the previous close of ₹9,290, up by 1.85 per cent.
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Source: The Hindu Business Line
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