Crude oil futures traded lower on Thursday morning following a 75 basis points increase in interest rate by the US Federal Reserve.
At 10 am on Thursday, January Brent oil futures were at $95.73, down by 0.45 per cent, and December crude oil futures on WTI were at $89.45, down by 0.61 per cent.
November crude oil futures were trading at ₹7,418 on Multi Commodity Exchange (MCX) in the initial trading hour of Thursday morning against the previous close of ₹7,435, down by 0.23 per cent, and December futures were trading at ₹7,352 against the previous close of ₹7,363, down by 0.15 per cent.
As expected, the US Fed Reserve’s meeting on Wednesday decided to increase in the interest rate from 3.25 per cent to 4 per cent, an increase of 75 basis points, to control inflation in that country. Several other economies across the world are also planning to increase interest rates in the coming days.
Market analysts fear that such a move may lead to slowdown in the economy impacting the demand for commodities such as crude oil.
However, the decrease in the crude oil inventory in the US prevented crude oil prices from falling further.
The petroleum status report by the US EIA (Energy Information Administration) for the week ending October 28, which was released on November 02, showed that the US commercial crude oil inventories (excluding those in the strategic petroleum reserve) decreased by 3.1 million barrels from the previous week.
At 436.8 million barrels, US crude oil inventories were about 3 per cent below the five-year average for this time of year.
US crude oil imports averaged 6.2 million barrels a day last week, an increase of 25,000 barrels a day from the previous week. Over the past four weeks, crude oil imports averaged around 6.1 million barrels a day, 0.5 per cent more than the same four-week period last year.
Dhania up, castorseed down
November natural gas futures were trading at ₹510 on MCX in the initial trading hour of Thursday morning against the previous close of ₹515.50, down by 1.07 per cent.
On the National Commodities and Derivatives Exchange (NCDEX), November dhaniya contracts were trading at ₹11,110 in the initial trading hour of Thursday morning against the previous close of ₹11,032, up by 0.71 per cent.
November castorseed futures were trading at ₹7,254 on NCDEX in the initial trading hour of Thursday morning against the previous close of ₹7,286, down by 0.44 per cent.