Crude oil futures traded higher on Friday morning as the market anticipated increased demand for heating oil due to cold weather in the US and Europe.
At 9:58 a.m. on Friday, March Brent oil futures were at $77.20, up by 0.36 per cent, and February crude oil futures on WTI (West Texas Intermediate) were at $74.17, up by 0.34 per cent.
During the initial hour of trading on Friday, January crude oil futures were trading at ₹6375 on Multi Commodity Exchange (MCX) against the previous close of ₹6372, up by 0.05 per cent, and February futures were trading at ₹6343 against the previous close of ₹6338, up by 0.08 per cent.
Cold weather in several regions of the US and Europe is creating demand for heating oil, which in turn creates demand for crude oil.
In their Commodities Feed for Friday, Warren Patterson, Head of Commodities Strategy of ING Think, and Ewa Manthey, Commodities Strategist, said oil prices remain well supported, with ICE Brent settling 1 per cent higher on Thursday. Sentiment remains positive due to colder weather across parts of the Northern Hemisphere, which is likely to boost oil demand, they said. In addition, spot Asian LNG is trading at a premium to oil, increasing the risk of substitution.
However, market reports noted that cold weather could impact travel in the northern hemisphere.
Meanwhile, ING Think’s Commodities Feed said that uncertainty over how hawkish Trump will be with Iran will provide some support to the commodity. Asian buyers have already been looking for alternative grades from West Asia, and broader sanctions against Russia and Iran are making this oil flow more difficult, it said.
In Europe, refined product inventories in the ARA (Amsterdam, Rotterdam, Antwerp) region increased by 50,000 tonnes week-on-week to 6.77 million tonnes. The increase was driven by gasoline stocks, which grew by 120,000 tonnes. All other products saw a decline in inventories, with gasoil stocks falling by 35,000 tonnes. However, with gasoil inventories still standing at 2.47 million tonnes, they are at very comfortable levels for this time of the year, ING Think’s Commodities Feed said.
January natural gas futures were trading at ₹320.90 on MCX during the initial hour of trading on Friday, down by 1.56 per cent from the previous close of ₹326.
On the National Commodities and Derivatives Exchange (NCDEX), January dhaniya contracts were trading at ₹7722 in the initial hour of trading on Friday against the previous close of ₹7744, down by 0.28 per cent.
In the initial hour of trading on Friday, April, turmeric (farmer polished) futures were trading at ₹15140 on NCDEX, down by 0.39 per cent from the previous close of ₹15200.