Crude oil futures traded lower on Tuesday morning as the market focused on the fundamentals.

At 9.55 am on Tuesday, August Brent oil futures were at $84.11, down by 0.17 per cent, and August crude oil futures on WTI (West Texas Intermediate) were at $79.58, down by 0.18 per cent.

June crude oil futures were trading at ₹6,692 on the Multi Commodity Exchange (MCX) during initial trading on Tuesday morning, against the previous close of ₹6,670, up by 0.33 per cent, and July futures were trading at ₹6,647, against the previous close of ₹6630, up by 0.26 per cent.

Soft focus so far

Quoting a client note from the BoFA Commodity and Derivatives Strategist, Francisco Blanch, a Reuters report said the oil market has shifted its focus back to fundamentals, which have been soft for some time. Global crude oil inventories and refined product storage in the US and Singapore, among other places, was higher, he said in the note.

According to the report, global oil demand growth decelerated to 890,000 barrels a day year-on-year in the first quarter, and data suggests consumption growth likely slowed further in the second quarter.

The latest data from the National Bureau of Statistics of China showed a decrease in crude oil refinery output in that country. ING Think’s Commodities Feed said crude oil refinery output in China fell 1.8 per cent year-on-year in May, primarily due to planned/ unplanned maintenance outages and curtailed processing rates on account of higher crude oil prices and lower margins.

Chinese refiners processed 60.5 million tonnes (around 14.25 million barrels a day) of crude oil in May. Cumulatively, China’s crude oil processing has dropped by around 0.3 per cent year-on-year to 301.8 million tonnes over the first five months of 2024, compared to around 8.7 per cent of growth seen for the full year 2023.

The situation in West Asia also impacted the crude oil market. According to a Reuters report, a US special envoy visited Jerusalem on Monday, seeking to calm the situation on the disputed border with Lebanon, where Israel said tensions with the Iran-backed Hezbollah militia was bringing the region close to a wider conflict.

Market players fear an escalation in the Israel-Hamas war could disrupt crude oil supplies from the key producing regions to the global market.

Major international agencies such as the Organization of the Petroleum Exporting Countries and allies, known as OPEC+, the International Energy Agency (IEA) and the US Energy Information Administration (EIA) had come out with reports on the crude oil market last week. In their forecast, they had highlighted increased demand for crude oil in the second half of 2024. However, the reports differed on the level of increase in demand for the commodity.

Jeera, dhaniya gain

June zinc futures were trading at ₹258.90 on MCX, against the previous close of ₹257.60, up by 0.50 per cent.

On the National Commodities and Derivatives Exchange (NCDEX), July jeera contracts were trading at ₹28,375, against the previous close of ₹27,880, up by 1.78 per cent.

June dhaniya futures were trading at ₹7,638 on the NCDEX, against the previous close of ₹7,432, up by 2.77 per cent.