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Crude oil futures traded lower on Monday morning on fears that Chinese demand may decline due to the lockdown in Shanghai following a fresh outbreak of Covid-19.
At the time of filing this report, May Brent oil futures traded at $117.51, down by 2.60 per cent, and May crude oil futures on WTI traded at $110.50, down by 2.99 per cent.
April crude oil futures were trading at ₹8,464 on the Multi Commodity Exchange (MCX) in the initial hour of Monday morning against the previous close of ₹8,618, down by 1.79 per cent; and May futures were trading at ₹8,310 against the previous close of ₹8,436, down by 1.49 per cent.
On Sunday, authorities in Shanghai announced the suspension of all activities after the city reported cases of asymptomatic Covid infection. Announcing the lockdown over nine days, the authorities ordered firms and factories to suspend manufacturing activities. As part of Covid control measures, Shanghai authorities also said all public transport and other vehicles will not be allowed to ply on the roads.
In his crude oil outlook for the day, Rahul Kalantri, VP (Commodities) of Mehta Equities Ltd, said crude oil showed high volatility on Friday, as prices cooled off in the early trading session after US President Joe Biden spoke about supplying additional gas to the European countries. But prices recovered again in the late evening session after an attack on a Saudi Arabia oil facility, he said.
Houthi attacks
Yemen’s Houthis said they launched attacks on Saudi energy facilities on Friday and the Saudi-led coalition said Aramco’s fuel distribution station in Jeddah was targeted by an attack, but that a fire in two tanks at the facility had been brought under control. Saudi Arabia also said in a statement that it will not be held responsible for a short supply of oil due to Houthi attacks. He said global markets are facing a short supply due to the Russia-Ukraine war and any supply disturbance from the Saudis could continue to support oil prices.
“We expect crude oil prices to remain volatile in the week ahead of the OPEC meetings. Crude oil has support at $107.00–104.80 and the resistance is at $112.80–115.00. In rupee terms, crude oil has support at ₹8,450-8,300, while resistance is at ₹8,748–8,880,” he said.
April cotton futures were trading at ₹42,930 on the MCX in the initial hour of Monday morning, against the previous close of ₹41,870, up by 2.53 per cent.
On the MCX, April natural gas futures were trading at ₹433.40 in the initial hour of Monday morning, against the previous close of ₹426.40, up by 1.64 per cent.
Kapas gain
On the National Commodities and Derivatives Exchange (NCDEX), April kapas futures were trading at ₹2,194.50 in the initial hour of Monday morning, against the previous close of ₹2,161.50, up by 1.53 per cent.
April castor seed contracts were trading at ₹7,250 on NCDEX in the initial hour of Monday morning, against the previous close of ₹7,280, down by 0.41 per cent.
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