Crude oil futures edged higher on commodity exchanges on Monday morning as the G-7 nations announced to phase out the import of Russian oil.

At 10 am, July Brent oil futures were at $112.64, up by 0.22 per cent, and June crude oil futures on WTI were at $109.79, up by 0.02 per cent.

May crude oil futures were trading at ₹8,486 on Multi Commodity Exchange (MCX) in early trade against the previous close of ₹8,447, up by 0.46 per cent; and June futures were trading at ₹8,410 against the previous close of ₹8,352, up by 0.69 per cent.

In a joint statement on Sunday, G-7 leaders said that their countries are committed to phase out dependency on Russian energy, including banning of Russian oil imports.

“We will ensure that we do so in a timely and orderly fashion. We will work together and with our partners to ensure stable and sustainable global energy supplies and affordable prices for consumers,” they said in the statement.

Japan ‘ban’

On Sunday, Japan announced the ‘in-principle’ ban of the Russian crude oil import. Japan is one of the major crude oil importers and member of G-7,

The proposal of European Union to ban the import of Russian crude oil is still under discussion with objections to such a move by some countries. On Sunday, Bulgaria said that it will veto oil sanctions on Russia by European Union, if it does not get a derogation from the proposed embargo.

Saish Sandeep Sawant Dessai, Research Associate (Base Metals) of Angel One Ltd, said that crude, after gaining over 6 per cent in the previous week, continued the upward momentum as it concluded the following week with a 4.4 per cent gain.

Prices were on the boil after the European Union had laid out plans for new sanctions against Russia, which included phasing out imports of Russian refined products and a ban on all shipping and insurance services for transporting Russian oil.

Prices of crude came under pressure during the week on the back of a stronger dollar which kept oil prices in check. A strong dollar makes oil more expensive for holders of other currencies, he said.

On the other hand, OPEC+ agreed to another modest increase which was in line with its plan to unwind curbs made when the pandemic hammered demand.

He said it is going to be a challenge for the European Union to find an alternate solution post the Russian oil embargo, given the soaring high energy prices, as it imports 3.5 million barrels of Russian oil and oil products a day and also depends on Moscow's gas supplies.

In his outlook for the day, he said: “We expect crude prices to maintain their upward trend as fears of a supply shortage linger as a result of the EU’s new sanctions, which include a Russian oil embargo.”

May zinc futures were trading at ₹325.25 on MCX in the initial hour of Monday morning against the previous close of ₹326.10, down by 0.26 per cent.

Metals to head higher

Saish Sandeep Sawant Dessai said industrial metals continue to move northwards as most of the metals ended on a negative note, except for copper, which ended nearly unchanged.

Prices of copper and aluminium have slipped to their three-month lows over worries of softening demand from China as services sector activity contracted at the steepest rate in April.

In his outlook for the day, he said the base metals would remain under pressure as the current Covid situation in China, the world’s largest metals consumer, has hammered the overall demand sentiment, which might have a negative influence on metal prices in the short term.

Dhaniya gains flavour

On the National Commodities and Derivatives Exchange (NCDEX), May dhaniya futures were trading at ₹11,400 in the initial hour of Monday morning against the previous close of ₹11,298, up by 0.90 per cent.

May turmeric (farmer polished) contracts were trading at ₹8,158 on NCDEX in the initial hour of Monday morning against the previous close of ₹8,204, down by 0.56 per cent.