With the European Union finding it difficult to come out with a unanimous decision on the ban of Russian crude oil following its war with Ukraine, crude oil futures eased a bit on Tuesday morning.

At 10.12 am on Tuesday, July Brent oil futures were at $113.98, up by 2.17 per cent, and July crude oil futures on WTI were at $111.56, down by 0.23 per cent.

May crude oil futures were trading at ₹8,848 on Multi Commodity Exchange (MCX) in the initial hour of Tuesday morning against the previous close of ₹8,873, down by 0.28 per cent; and June futures were trading at ₹8,685 against the previous close of ₹8,708, down by 0.26 per cent.

A meeting of the foreign ministers of European Union on Monday failed to reach consensus on banning the import of Russian crude oil. Hungary, one of the member nations of European Union, resisted the idea of such a ban. A complete ban on Russian crude oil would further tighten the crude oil market.

Market reports also noted that the demand recovery is in sight as China, one of the major consumers of crude oil is planning to relax Covid-related restrictions. Many regions in China are under lockdown due to Covid. This has affected the demand for crude oil in the global markets.

Slowing Chinese output

However, Saish Sandeep Sawant Dessai, Research Associate, Base Metals, Angel One Ltd, said crude prices continue to extend their run of positive momentum as Brent crude ended 1.62 per cent higher and NYMEX crude ended 3.36 per cent higher.

The slowdown in the Chinese industrial output as the manufacturing PMI numbers came below the 50 mark, indicating a contraction in the expansion of the manufacturing sector. However, easing coronavirus cases at the hardest hit areas in China indicates a positive indication that significant demand recovery might be seen after the country was battling its way with the spread of the virus, leading to a few Chinese city lockdowns eventually dampening the demand for crude and other commodities.

In his outlook for the day, he said crude is expected to remain in the positive territory on the back of optimism of the European Union might strike a deal, which will see a shortage of Russian oil to the European countries.

May natural gas futures were trading at ₹625.60 on MCX in the initial hour of Tuesday morning against the previous close of ₹611.90, up by 2.24 per cent.

Metals look up

Saish Sandeep Sawant Dessai said most of the industrial metals ended with gains on Monday except for nickel, which ended with a 2 per cent cut.

The gains in the metal pack came on the back of optimism about easing the Covid restrictions in top consumer China, which showed early signs of a demand revival.

However, higher interest rates and expectations of further rises have boosted the US dollar, which has been a major headwind as a rising dollar makes the dollar-backed commodities expensive for holders of other currencies.

On another note, zinc prices were also on the rise after record high power prices and the shutting down of European smelters in the face of historically high power prices made worse by the war between Russia and Ukraine, he said.

In his outlook for the day, he said overall the base metals are expected to remain under pressure given the dollar hovering at the two-decade highs. However, the downside is likely to remain capped after recovery signs from the top metal consumer China boosted the sentiments.

Castor heads north

On the National Commodities and Derivatives Exchange (NCDEX), May castor futures were trading at ₹7,578 in the initial hour of Tuesday morning against the previous close of ₹7,474, up by 1.39 per cent.

June steel long contracts were trading at ₹53,500 on NCDEX in the initial hour of Tuesday morning against the previous close of ₹54,290, down by 1.46 per cent.