Brent crude oil futures rose to a 14-year high of $139 a barrel in the early trade of Monday in Asia before trading below $130, while WTI crude oil futures soared 13 per cent to $130 a barrel. This is for the first time that Brent crude hit $139 a barrel mark after 2008. This followed the risk of a ban on Russian crude oil imports from the Western nations.
May Brent oil futures were at $130.26 up by 12.21 per cent and April crude oil futures on WTI at $124.74, up by 7.83 per cent.
March crude oil futures were trading at ₹9,609 on Multi Commodity Exchange (MCX) in the initial hour of Monday morning against the previous close of ₹8,580, up by 11.99 per cent; and April futures were trading at ₹9,333 against the previous close of ₹8355, up by 11.71 per cent.
In his outlook for crude oil, Rahul Kalantri, Vice-President (Commodities) of Mehta Equities Ltd, said Brent oil prices soared to their highest since 2008 due to delays in the potential return of Iranian crude to global markets and as the US and European allies consider banning imports of Russian oil.
Crude prices posted their highest weekly gains since the middle of 2020. Brent prices gained 21 per cent and WTI posted 26 per cent gains last week
Stating that Russia exports 4-5 million barrels of crude oil daily making it the second-largest crude exporter in the world after Saudi Arabia, he said: “We expect crude oil prices to remain firm amid geo-political tensions and rising demand. WTI prices could test $140 a barrel and Brent prices could also test $134 a barrel in the upcoming sessions. Crude oil is having support at $118–110.40 and resistance is at $129–140 in today’s session. In rupee terms, crude oil has support at ₹8,575-8350; while resistance is at ₹9,000-9120.
Sanctions against Russia
On Sunday, the US Secretary of State Antony Blinken said the US and its allies are considering banning Russian oil and natural gas imports. This is seen as an an effort to ramp up sanctions against Russia for its war with Ukraine.
In the meantime, there were uncertainties over the talks to revive nuclear deal with Iran by the US and others as Russia demanded for guarantees from the US that sanctions in it would not hurt its trade with Iran. Market reports suggest that analysts’ view this as a way by Russia to bypass western sanctions on it.
March nickel contracts were trading at ₹2,563 on MCX in the initial hour of Monday morning against the previous close of ₹2229.40, up by 15 per cent.
The three-month nickel contracts on LME (London Metal Exchange) were trading at $34230, up by 18.37 per cent.
Russia contributes to around 7 per cent to the global nickel production, and sanctions on Russia have led to the business disruption affecting the trade in commodities such as nickel, aluminium and copper among others.
Steel firms up
On the National Commodities and Derivatives Exchange (NCDEX), March steel long futures were trading at ₹60,110 in the initial hour of Monday morning against the previous close of ₹56710, up by 6 per cent; and April futures were trading at ₹59,700 against the previous close of ₹57,730, up by 3.41 per cent.
April turmeric (farmer finished) contracts were trading at ₹9,080 on NCDEX in the initial hour of Monday morning against the previous close of ₹9,358, down by 2.97 per cent; and May contracts were trading at ₹9,200 against the previous close of ₹9454, down by 2.69 per cent.