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Crude oil futures traded lower on Monday morning following a price cut announcement by Saudi Arabia.
At 9.55 am on Monday, March Brent oil futures were at $77.87, down by 1.13 per cent, and February crude oil futures on WTI (West Texas Intermediate) were at $72.91, down by 1.22 per cent.
January crude oil futures were trading at ₹6070 on Multi Commodity Exchange (MCX) during initial trading against the previous close of ₹6128, down by 0.95 per cent, and February futures were trading at ₹6105 against the previous close of ₹6161, down by 0.91 per cent.
Saudi Arabia, one of the major producers of crude oil in the global market, has taken a decision to cut prices by $2 a barrel. The prices of February-loading Arab Light to Asia were slashed by $2 a barrel below the Oman-Dubai benchmark. An increase in crude oil production by some countries has forced major producers such as Saudi to take this decision.
Rift in OPEC+
Though OPEC (Organisation of the Petroleum Exporting Countries) and its allies, known as OPEC+, had asked member countries to take decision on voluntary production output cuts recently, some OPEC+ members did not agree to this.
Recently Angola, one of the members of OPEC+, decided to exit the group also. Added to this, there has been increase in the crude oil production in the US also. According to market reports, there has been increase in the oil rigs in the US in the recent weeks. All these factors are increasing competition for major producers such as Saudi Arabia in the crude oil market.
However, the rising tensions in the Middle-East due to Israel-Hamas war and the subsequent attacks by the Houthis on the merchant vessels in the Red Sea region limited further fall in the price of crude oil in the market.
Guar gum up, kapas down
January natural gas futures were trading at ₹238.30 on MCX in the initial trading hour of Monday morning against the previous close of ₹236.50, up by 0.76 per cent.
On the National Commodities and Derivatives Exchange (NCDEX), January guar gum contracts were trading at ₹10,260 against the previous close of ₹10,210, up by 0.49 per cent.
April kapas (unprocessed cotton) futures were trading at ₹1540 on NCDEX against the previous close of ₹1547, down by 0.48 per cent.
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