Crude oil traded lower on Tuesday morning as the production levels of some members of the OPEC (Organisation of Petroleum Exporting Countries) and its allies, known as OPEC+, remained high despite Saudi Arabia deciding to reduce its production output.
At 9.52 am on Tuesday, August Brent oil futures were at $76.45, down by 0.34 per cent and July crude oil futures on WTI were at $71.82, down by 0.46 per cent.
June crude oil futures were trading at ₹5,944 on Multi Commodity Exchange (MCX) during initial trading against the previous close of ₹6,004, down by 1 per cent, and July futures were trading at ₹5,976 as against the previous close of ₹6,036, down by 0.99 per cent.
US data impact
Saudi Arabia’s decision to reduce production output by 1 million barrels a day from July helped boost the price of crude oil in Monday’s session.
However, market analysts felt that this reduction may not impact the production of other members. Production outputs for some OPEC+ members such as Russia, Nigeria, and Angola remained high. In fact, OPEC+ allowed the United Arab Emirates to raise the production output for 2024.
Meanwhile, the US service sector activity in May remained below that of April. The non-manufacturing purchasing managers’ index (PMI) in the US declined to 50.3 in May from 51.9 in April.
- Also read: Crude Check: Unfavourable risk-reward
Guar gum up, cottonseed oil cake down
June zinc futures were trading at ₹209.35 on MCX against the previous close of ₹208.10, up by 0.60 per cent.
On the National Commodities and Derivatives Exchange (NCDEX), June guar gum contracts were trading at ₹10,702 in the initial trading hour of Tuesday morning against the previous close of ₹10,654, up by 0.45 per cent.
June cottonseed oilcake futures were trading at ₹2559 on NCDEX against the previous close of ₹2575, down by 0.62 per cent.