Crude oil futures up on Libya, Russia factors

Crude oil futures traded higher on Monday morning following concerns over the supply due to the developments in Libya and Russia.

At the time of filing this report, June Brent oil futures were at $112.82, up by 1 per cent; and June crude oil futures on WTI were at $107.40, up by 0.96 per cent.

May crude oil futures were trading higher at ₹8,224 on Multi Commodity Exchange (MCX) in the initial hour of Monday morning against the previous close of ₹8064, up by 1.98 per cent; and April futures were trading at ₹8245 against the previous close of ₹8078, up by 2.07 per cent.

Protests in Libya

According to reports, two Libyan ports were forced to stop loading of crude oil following the protests against the Prime Minister, Abdul Hamid Dbeibah. Libya stopped production at its El Feel oil field on Sunday following these protests. Reports said the stoppage of work at El Feel is likely to bring down the crude oil production by 70,000 barrels a day.

This development comes at a time when the global oil market is facing tight supplies as a result of the ongoing conflict between Russia and Ukraine. Russia is a major producer of crude oil in the world.

More sanctions on Russia

Reports noted that Russia, which is already facing sanctions from the US and the UK, is likely to face more sanctions on oil exports from European nations. However, countries such as Germany are not supporting an immediate sanctions on Russian oil.

Rahul Kalantri, VP (Commodities) of Mehta Equities Ltd, said that crude oil prices jumped nearly 9 per cent last week amid the continuation of Russia-Ukraine war and decline in natural gas inventories. Despite softening demand from China due to rising Covid cases, global energy prices jumped again last week.

Kalantri said the news of proposed ban on Russian oil by the EU has lifted crude oil prices again in the international markets.

The US natural gas inventories also fell to three-year lows due to record export and higher demand of heating oil. As a result, natural gas prices crossed $7 per btu last week and also supported crude oil prices.

“We expect crude oil would trade in positive zone in today’s session. Crude oil is having support at $103.20-$101.50 and resistance is at $109.80–112.50, In rupee terms crude oil has support at ₹7,980-7,760, while resistance is at ₹8,210–8,350,” Kalantri said.

Meanwhile, the April natural gas futures were trading at ₹572.90 on MCX in the initial hour on Monday morning against the previous close of ₹555.70, up by 3.10 per cent.

NCDEX

On the National Commodities and Derivatives Exchange (NCDEX), May steel long futures were trading at ₹58,600 in the initial hour of Monday morning against the previous close of ₹57330, up by 2.22 per cent.

April jeera contracts were trading at ₹22,000 on NCDEX in the initial hour of Monday morning against the previous close of ₹22,455, down by 2.03 per cent.

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