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Crude oil futures edged up on Monday morning amidst reports of G7 countries pushing for a price cap mechanism for the import of Russian crude oil.
At 10.02 am on Monday, August Brent oil futures were at $113.32, up by 0.17 per cent, and August crude oil futures on WTI were at $107.64, up by 0.02 per cent.
July crude oil futures were trading at ₹8,439 on the Multi Commodity Exchange (MCX) in the initial hour of Monday morning, against the previous close of ₹8,384, up by 0.66 per cent; and August futures were trading at ₹8,225, as against the previous close of ₹8173, up by 0.62 per cent.
Slowdown fears persist
Quoting a German government source, a Reuters report said the G7 leaders of Britain, France, the US, Germany, Japan, Italy and Canada were in talks on a possible price cap on Russian oil. It also said an official from the French presidency said Paris would push for a price cap on Russian oil and gas.
According to market reports, the potential mechanism would work by imposing restrictions on insurance and shipping, allowing only the transportation of Russian crude and petroleum products sold below an agreed threshold.
Meanwhile, fears of a global economic slowdown lingered in the market as some major economies recently increased interest rates in their countries. This move was aimed at curbing inflation in those economies. A slowdown in the economy would also lead to a decline in demand for commodities such as crude oil.
In his outlook for the day, Saish Sandeep Sawant Dessai, Research Associate, Base Metals, Angel One Ltd, said: “Given the rising oil prices and inflation, crude is likely to remain under pressure. Higher interest rates would further stifle demand for crude.”
July copper futures were trading at ₹702.55 on the MCX in the initial hour of Monday morning, against the previous close of ₹696.10, up by 0.93 per cent.
Copper may drop more
In his outlook for the day, Saish Sandeep Sawant Dessai said: “We expect copper to trade lower towards ₹688 levels, a break of which could prompt the price to move lower to ₹678 levels.”
On the National Commodities and Derivatives Exchange (NCDEX), July steel long futures were trading at ₹49,500 in the initial hour of Monday morning, against the previous close of ₹46,900, up by 5.54 per cent.
July guar gum contracts were trading at ₹9,715 on NCDEX in the initial hour of Monday morning, against the previous close of ₹9,872, down by 1.59 per cent.
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