Crude oil futures traded more than 2 per cent higher on Friday morning following the attack by Israeli missiles on a strategic facility in Iran.
At 9.54 am on Friday, June Brent oil futures were at $89.06, up by 2.24 per cent, and May crude oil futures on WTI (West Texas Intermediate) were at $84.67, up by 2.34 per cent.
April crude oil futures were trading at ₹7078 on Multi Commodity Exchange (MCX) during the initial hour of trading on Friday morning against the previous close of ₹6933, up by 2.09 per cent, and May futures were trading at ₹7033 against the previous close of ₹6896, up by 1.99 per cent.
ABC News, which quoted a US official, said that Israel targeted a site in Iran with missiles. Market reports noted that the site could be a strategic facility in Iran.
There were reports of explosions in Iraq and Syria apart from Iran. However, the US official could not confirm whether Iraq and Syria sites were also hit.
The Fars news agency from Iran said an explosion was heard at an airport in the central city of Isfahan, but the cause was not immediately known. It also reported the suspension of flights over the cities of Isfahan, Shiraz, and Tehran. Market reports said that many Iranian nuclear sites are located in Isfahan province, including Natanz, which focuses on Iran’s uranium enrichment programme.
In the Commodities Daily for Friday, ING Think’s Warren Patterson and Ewa Manthey said oil prices had surged this morning following unconfirmed reports of explosions in Iran, Syria and Iraq.
“If these reports turn out to be true, fears over further escalation will only grow, as well as concerns that we are potentially moving closer towards a situation where oil supply risks lead to actual supply disruptions,” they said.
Apart from this development, the crude oil market also got a boost following the news of the reimposition of US sanctions on Venezuelan oil.
May natural gas futures were trading at ₹167.80 on MCX during the initial hour of trading on Friday morning against the previous close of ₹166.50, up by 0.78 per cent.
On the National Commodities and Derivatives Exchange (NCDEX), June turmeric (farmer polished) contracts were trading at ₹18504 in the initial hour of trading on Friday morning against the previous close of ₹18346, up by 0.86 per cent.
May cottonseed oilcake futures were trading at ₹2552 on NCDEX in the initial hour of trading on Friday morning against the previous close of ₹2560, down by 0.31 per cent.