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Crude oil futures traded higher on Monday morning following the Saudi Arabia’s decision to increase the crude oil prices for July sales.
At 10.07 am on Monday, the August Brent oil futures were at $120.63, up by 0.76 per cent; and July crude oil futures on WTI were at $119.67, up by 0.67 per cent.
June crude oil futures were trading at ₹9,300 on Multi Commodity Exchange (MCX) in the early deals against the previous close of ₹9,235, up by 0.70 per cent; and July futures were trading at ₹9,129 s against the previous close of ₹9,051, up by 0.86 per cent.
A Reuters report said that Saudi’s official selling price for July-loading Arab Light to Asia was increased by $2.1 a barrel from June against the market expectations of $1-1.5 a barrel. However, there was no change in the crude going to the US.
Saudi’s move to increase the price followed a decision by the OPEC (Organization of the Petroleum Exporting Countries) and its allies to increase the crude oil output in July and August to 648,000 barrels a day from the original plan of 432,000 barrels a day.
However, market participants are doubtful of this increase. OPEC+ members such as Russia, Angola, and Nigeria are finding it difficult to meet their production targets. Following this, the OPEC+ may find it difficult to reach its production targets for July and August.
In his outlook for the day, Saish Sandeep Sawant Dessai, Research Associate, Base Metals, Angel One Ltd, said: “We expect crude to trade higher towards ₹9,410 levels, break of which could prompt the price to move higher to ₹9,600 levels.”
Copper down
June copper futures were trading at ₹794.45 on MCX in the initial hour of Monday against the previous close of ₹800, down by 0.69 per cent.
Saish Sandeep Sawant Dessai said, the copper prices have been gaining traction with the metal initially rising on market optimism that China’s loosening of restrictive Covid measures would boost demand. However, the gain was capped by a stronger US dollar and expectations of two more rate hikes by the Fed of 50 basis points each at its forthcoming meetings.
He said, the rise in oil prices stoked fears of more global inflation, encouraging the US Federal Reserve and other central banks to keep raising interest rates, making greenback-denominated metals more expensive for buyers using other currencies.
“We expect copper to trade lower towards ₹784 levels, break of which could prompt the price to move lower to ₹765 levels,” he said.
NCDEX
On the National Commodities and Derivatives Exchange (NCDEX), June cottonseed oilcake futures were trading at ₹2,833 in the initial hours of trade against the previous close of ₹2,818, up by 0.53 per cent.
June steel long contracts were trading at ₹47,100 on NCDEX in the early deals against the previous close of ₹47,310, down by 0.44 per cent.
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