Crude oil prices headed south on Friday morning following reports of increases in interest rates by some central banks across the world, with Brent crude dropping below $90 a barrel.
At 10 am on Friday, November Brent oil futures were at $89.78, down by 0.75 per cent, and November crude oil futures on WTI were at $83.04, down by 0.54 per cent.
October crude oil futures were trading at ₹6,767 on the Multi Commodity Exchange (MCX) in the initial trading hour of Friday morning against the previous close of ₹6,807, down by 0.59 per cent, and November futures were trading at ₹6,760, against the previous close of ₹6,802, down by 0.62 per cent.
Iran nuke deal talks stalled, stops further fall
After the US Fed Reserve increased the interest rate by 75 basis points during the week, central banks in some other countries also increased their interest rates. They included Bank of England, Swiss National Bank, and central banks in Norway and Indonesia. Such increases affected the demand for crude oil as the market felt the interest rate hikes may lead to a slowdown in the economy.
However, a further fall in prices was arrested by reports of the stalling of the 2015 Iran nuclear deal and Russia’s military mobilisation.
Speaking on the sidelines of the UN General Assembly, a senior US State Department official said efforts to revive the 2015 Iran nuclear deal have stalled. The official attributed this to Iran’s demand for the closure of investigations by the UN nuclear watchdog.
Russia’s military mobilisation indicated the further escalation of the Russia-Ukraine war. This may further impact the supply of crude oil in the global market.
In his outlook for the day, Prathamesh Mallya, AVP (Research, Non-Agri Commodities, and Currencies) of Angel One Ltd, said: “Given the stalling of the 2005 Iran nuclear agreement and the prospect of further supply disruption as Russian and Ukrainian tensions rise, crude prices are likely to rise.”
Jeera, dhaniya gain
October natural gas futures were trading at ₹598.60 on MCX in the initial trading hour of Friday morning, against the previous close of ₹602.80, down by 0.70 per cent.
On the National Commodities and Derivatives Exchange (NCDEX), October jeera contracts were trading at ₹25,070 in the initial trading hour of Friday morning, against the previous close of ₹24,910, up by 0.64 per cent.
October dhaniya futures were trading at ₹10,580 on NCDEX in the initial trading hour of Friday morning, against the previous close of ₹10,542, up by 0.36 per cent.