Crude oil dips as market turns cautious awaiting US Fed meeting outcome

Crude oil futures traded lower on Wednesday morning as the market remained cautious over the outcome of the US Federal Reserve meeting later in the day.

At 9.52 a.m. on Wednesday, May Brent oil futures were at $87.25, down by 0.15 per cent, and May crude oil futures on WTI (West Texas Intermediate) were at $82.57, down by 0.19 per cent.

April crude oil futures were trading at ₹6,856 on Multi Commodity Exchange (MCX) during initial trading on Wednesday morning against the previous close of ₹6,887, down by 0.45 per cent, and May futures were trading at ₹6,826 against the previous close of ₹6,842, down by 0.23 per cent.

Looking for cues

The market is waiting for cues from the meeting of the US Federal Reserve later in the day. General perception in the market is that the US Fed will keep the interest rates unchanged. But the market will also be looking at any signal on interest rate scenario in the coming months from this meeting.

US interest rates hold significance in the crude oil market. A higher interest rate scenario make the commodity costlier in the world market, impacting its demand.

Meanwhile, the data released by the industry body American Petroleum Institute (API) showed a decrease in the crude oil inventories in the US for the week ending March 15.

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According to API, crude oil inventories in the US declined by 1.51 million barrels for the week ending March 15 against a decline of 5.52 million barrels in the previous week.

Official data on crude oil inventories by the US EIA (Energy Information Administration) are expected later in the day.

Castorseed gains

April natural gas futures were trading at ₹157.50 on MCX against the previous close of ₹155.70, up by 1.16 per cent.

On the National Commodities and Derivatives Exchange (NCDEX), April castorseed contracts were trading at ₹6,018 against the previous close of ₹5991, up by 0.45 per cent.

April cottonseed oilcake futures were trading at ₹2,655 on NCDEX against the previous close of ₹2665, down by 0.38 per cent.

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