Crude oil futures traded below $79 a barrel on Monday morning despite the attack on commercial vessels in the Red Sea region over the weekend. Uncertainty over the voluntary production output cuts by some members of OPEC (Organisation of the Petroleum Exporting Countries) and its allies, known as OPEC+, impacted crude oil prices on Monday morning.

At 9.52 am on Monday, February Brent oil futures were at $78.36, down by 0.66 per cent, and January crude oil futures on WTI (West Texas Intermediate) were at $73.62, down by 0.61 per cent.

December crude oil futures were trading at ₹6153 on Multi Commodity Exchange (MCX) during initial trading against the previous close of ₹6281, down by 2.04 per cent, and January futures were trading at ₹6199 as against the previous close of ₹6303, down by 1.65 per cent.

Attack on vessels

Geopolitical tensions due to the Israel-Hamas war in the Middle East region intensified over the weekend following the collapse of talks to extend a ceasefire between Israel and Hamas. This led to the resumption of war in the region.

Meanwhile, the US military said on Sunday three commercial vessels came under attack in the international waters in the Red Sea region. Two Israeli vessels faced drone and missile attacks in the region. Yemen’s Houthi group claimed responsibility for this.

Though the prevailing geopolitical tensions did not have much impact on crude oil supplies to the world market, the recent attack on commercial vessels led to apprehensions over supply disruptions.

Uncertainty over the voluntary production output cuts by some OPEC+ members remained on Monday morning, impacting the commodity’s price. Though OPEC+ announced voluntary production output cuts of around 2.2 million barrels during the first quarter of 2024, the effective additional voluntary output cuts would be about 900,000 barrels a day as the remaining cuts were the extension of the existing production output cuts.

These production output cuts are voluntary. Some members of OPEC+, who had opposed the quota for them, had stated that they would rather increase their crude oil production level. This helped ease the apprehensions over the supply tightness in the market, impacting the commodity’s price globally.

Added to this, the recent economic indicators from the US and China -- the two major oil consumers in the world market – showed a slowing down of the economy in those countries.

Turmeric gleams, jeera cools

December natural gas futures were trading at ₹227.30 on MCX against the previous close of ₹236.30, down by 3.81 per cent.

On the National Commodities and Derivatives Exchange (NCDEX), December turmeric (farmer polished) contracts were trading at ₹12,858 against the previous close of ₹12,590, up by 2.13 per cent.

December jeera futures were trading at ₹43,640 on NCDEX in the initial trading hour of Monday morning against the previous close of ₹44,115, down by 1.08 per cent.