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With the crude oil market turning cautious ahead of the US inflation data, which is expected on Wednesday, crude oil traded lower in the early trade on Tuesday.
At 9.53 am on Tuesday, July Brent oil futures were at $76.75, down by 0.34 per cent, and June crude oil futures on WTI were at $72.94, down by 0.30 per cent.
May crude oil futures were trading at ₹5,986 on Multi Commodity Exchange (MCX) during initial trading against the previous close of ₹6,009, down by 0.38 per cent, and June futures at ₹6,009 against the previous close of ₹6,028, down by 0.32 per cent.
Impact in commodities market
Ahead of the Wednesday’s inflation data release in the US, crude oil market remained cautious as the data will have a bearing on the US Federal Reserve’s interest rate decisions in the next meeting.
The Fed’s meeting last week raised interest rates by 25 basis points. However, Fed’s guidance had not mentioned about the need for future interest rate hikes.
Any increase in interest rates will impact the demand for commodities such as crude oil.
Meanwhile, the Survey of Consumer Expectations for April 2023, which was released by the Federal Reserve Bank of New York’s Center for Microeconomic Data on Monday, showed the decline in inflation expectations in the short-term horizon. However, it increased slightly at the medium- and longer-term horizons.
Median inflation expectations declined by 0.3 percentage point at the one-year-ahead horizon to 4.4 per cent, but increased by 0.1 percentage point at the three- and five-year-ahead horizons to 2.9 per cent and 2.6 per cent, respectively.
tHE recent rate hikes by US Federal Reserve were aimed at controlling the inflation in that country.
Market is also now waiting for the release of OPEC’s (Organization of the Petroleum Exporting Countries) monthly report on Thursday. The report will give an outlook of the crude oil market across the globe. OPEC had unexpectedly cut the crude oil output a few weeks ago.
Dhaniya, jeera cool down
May natural gas futures were trading at ₹183.70 on MCX during initial trading against the previous close of ₹183, up by 0.38 per cent.
On the National Commodities and Derivatives Exchange (NCDEX), May dhaniya contracts traded at ₹6,830 against the previous close of ₹6,922, down by 1.33 per cent.
May jeera futures were trading at ₹47,230 on NCDEX against the previous close of ₹47,715, down by 1.02 per cent.
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