Brent crude oil futures were trading below $110 a barrel on Friday. This follows Russia’s announcement on Thursday that it will meet the contractual obligations of crude supply, and also due to the fear of demand destruction following the increase in the price of the commodity.

May Brent oil futures were at $109.21, down by 1.73 per cent; and April crude oil futures on WTI at $106.28, up by 0. 25 per cent.

March crude oil futures were trading at ₹8115 on Multi Commodity Exchange (MCX) in the initial hour of Friday morning against the previous close of ₹8154, down by 0.48 per cent; and April futures were trading at ₹7908 against the previous close of ₹7934, down by 0.33 per cent.

Rahul Kalantri, VP (Commodities) of Mehta Equities Ltd, said crude oil prices recovered from their lows but unable to hold its gain amid rising inflation in the US and increasing production from the OPEC nations. The US inflation hit 7.9 per cent on annual basis in February, its highest levels since January 1982. As per the S&P Global commodity report, OPEC+ increased their highest monthly output in February in last seven months. He said Saudi Arabia emerged as the group’s largest producer in February, overtaking Russia for the first time since April 2020.

“WTI crude oil is having support at $100-96 and resistance at $107.80–112.00. In rupee terms, crude oil has support at ₹7,860-7,670, while resistance is at ₹8,670–9,078,” he said.

Market reports said that investors analysed the extent of possible supply constraints following the Russia’s decision to meet the contractual obligations of crude oil supply, as Russia contributes to around 7 per cent to the global oil supplies and one-third of the European natural gas demands.

Quoting an analyst, a Bloomberg report said the latest US inflation data showed that the Russia-Ukraine war is likely to maintain the US price rise trajectory into summer. The analyst noted that this could lead to demand destruction for crude oil in the short term.

Aluminium

On MCX, March aluminium futures were trading at ₹282.85 in the initial hour of Friday morning against the previous close of ₹279.75, up by 1.11 per cent.

The three-month aluminium contracts on LME (London Metal Exchange) were trading at $3484.50, up by 1.66 per cent.

Investors are worried over the impact of Russia-Ukraine war impacting the supply of this commodity. Russia meets around 6 per cent of the global demand of aluminium.

NCDEX

On the National Commodities and Derivatives Exchange (NCDEX), April steel long contracts were trading at ₹60900 on Friday morning against the previous close of ₹60010, up by 1.48 per cent.

March guargum futures were trading at ₹11195 on NCDEX in the initial hour of Friday morning against the previous close of ₹11091, up by 0.94 per cent; and April guargum futures were trading at ₹11345 against the previous close of ₹11267, up by 0.69 per cent.

Published on March 11, 2022