Brent crude oil gained marginally on Friday morning following the reports of the European Union tentatively agreeing for a $60 a barrel price cap on Russian oil import.
At 10.01 am on Friday, February Brent oil futures were up by 0.14 per cent at $87 and January crude oil futures on WTI were at down by 0.02 per cent $81.20.
December crude oil futures were trading at ₹6,607 on Multi Commodity Exchange (MCX) during initial hours to trading against the previous close of ₹6,673, down by 0.99 per cent, and January futures were trading at ₹6,640 against the previous close of ₹6699, down by 0.88 per cent.
Poland wants lower cap
A Reuters report said that European Union nations have tentatively agreed on a $60 a barrel price cap on Russian seaborne oil with an adjustment mechanism to keep the cap at 5 per cent below the market price. The report quoted diplomats and a document for this information.
However, the report said that Poland has been pushing for the lowest possible price cap. It had not confirmed its approval for the price cap proposal till Thursday evening.
It said the price cap will allow EU countries to continue importing Russian crude oil using Western insurance and maritime services as long as they do not pay more per barrel than the agreed limit. EU intends to limit Russia’s oil revenue with such a price cap.
China’s plans to soften Covid control measures also boosted the crude oil futures. Reports said that China is planning to allow low-risk patients to isolate at home.
Being a major consumer of crude oil in the global market, any Covid-related impact on the economy of that nation impacts the demand for the commodity. Covid control measures in the past few months have made a huge impact on the economy of China.
Meanwhile, Organization of Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, will meet on December 4 to discuss the production policy.
While some in the market are expecting the OPEC+ to announce further cut the production output of the commodity, a Reuters report citing a source said recently that the virtual meeting of the OPEC+ indicated little likelihood of a policy change.
December natural gas futures were trading at ₹548.30 on MCX in the initial trading hour of Friday morning against the previous close of ₹554.80, down by 1.17 per cent.
Cottonseed oil cake, guar gum gain
On the National Commodities and Derivatives Exchange (NCDEX), December cottonseed oilcake contracts were trading at ₹2,775 in the initial trading hour of Friday morning against the previous close of ₹2,756, up by 0.69 per cent.
December guar gum futures were trading at ₹12,630 on NCDEX in the initial trading hour of Friday morning against the previous close of ₹12,543, up by 0.69 per cent.