Crude oil traded lower on Wednesday morning following market reports of another interest rate hike by the US Fed Reserve in May.
At 9.53 am on Wednesday, June Brent oil futures were at $84.61, down by 0.19 per cent, and June crude oil futures on WTI were at $80.77, down by 0.16 per cent.
April crude oil futures were trading at ₹6,633 on the Multi Commodity Exchange (MCX) during initial trading against the previous close of ₹6,679, down by 0.69 per cent, and May futures were trading at ₹6,647 as against the previous close of ₹6,690, down by 0.64 per cent.
Inflation double the target
In an interview with CNBC on Tuesday, Raphael Bostic, Atlanta Federal Reserve President, said the economy still has a lot of momentum and is performing quite strongly, and inflation remains too high. “By pretty much every measure that you look at, current inflation is more than double what our target is. So there is still more work to be done and I am ready to do it,” Bostic said.
Market reports said any move to increase interest rates will slow economic growth and will impact the demand for commodities such as crude oil.
Meanwhile, data released by the American Petroleum Institute (API) showed a fall in crude oil inventories in the US. According to API data, crude oil inventories declined by 2.68 million barrels for the week ending April 14. This decline was more than what the market was expecting.
However, official data from US EIA (Energy Information Administration) is expected later in the day.
Also read our Explainer: What next after Federal Reserve’s 25 bps rate hike
Jeera, guar gum dip
April mentha oil futures were trading at ₹976 on the MCX during initial trading, against the previous close of ₹979.10, down by 0.32 per cent.
On the National Commodities and Derivatives Exchange (NCDEX), May jeera contracts were trading at ₹40,100 against the previous close of ₹40,380, down by 0.69 per cent.
May guar gum futures were trading at ₹11,222 on NCDEX against the previous close of ₹11,418, down by 1.72 per cent.