Crude oil down despite tight supply outlook
Crude oil futures traded lower on Tuesday morning despite tight supply outlook by major oil producers such as Iraq, Saudi Arabia and Russia. However, a Reuters report noted that Russia will increase its oil exports in March.
At 9.52 am on Tuesday, May Brent oil futures were at $86.73, down by 0.18 per cent, and May crude oil futures on WTI (West Texas Intermediate) were at $82.03, down by 0.16 per cent.
March crude oil futures were trading at ₹6845 on Multi Commodity Exchange (MCX) during the initial hour of trading on Tuesday morning against the previous close of ₹6844, up by 0.01 per cent, and April futures were trading at ₹6805 against the previous close of ₹6802, up by 0.04 per cent.
According to the Reuters report Russia will increase oil exports through its western ports in March by almost 200,000 barrels a day. Shipments will increase by 10 per cent compared to its initial plan for March, it said.
The recent drone attacks on Russian refineries by Ukraine had impacted the fuel production in Russia, which is a major producer in the world market. Attack on its oil refinery infrastructure is likely to lead to the increase of crude oil exports.
Meanwhile, Iraq said that it would cut crude oil production to 3.3 million barrels a day in the coming months to compensate for exceeding its OPEC quota since the beginning of the year.
Crude oil exports from the top oil producer in the world, Saudi Arabia, declined to 6.297 million barrels a day in January against 6.308 million barrels a day in December.
Market is now waiting for the conclusion of US Federal Reserve meeting on Wednesday. Expectations are that the Fed would keep the interest rates unchanged. Market reports said that higher rate of interest for longer period of time could impact the demand for commodities such as crude oil in the coming months.
April natural gas futures were trading at ₹154 on MCX during the initial hour of trading on Tuesday morning against the previous close of ₹153, up by 0.65 per cent.
On the National Commodities and Derivatives Exchange (NCDEX), April castorseed contracts were trading at ₹5920 during the initial hour of trading on Tuesday morning against the previous close of ₹5897, up by 0.39 per cent.
April kapas futures were trading at ₹1570.5 on NCDEX during the initial hour of trading on Tuesday morning against the previous close of ₹1580.50, down by 0.63 per cent.
