Crude oil gains as US pipeline to Canada remains shut

Crude oil traded higher on Monday morning as a pipeline that connects oil fields in Canada with refiners in the US remained shut, impacting the supply of the energy commodity. In addition, Russia’s warning on the G7 price cap boosted its price.

At 10 am on Monday, February Brent oil futures were at $76.60, up by 0.66 per cent, and January crude oil futures on WTI were at $71.66, up by 0.90 per cent.

December crude oil futures were trading at ₹5,947 on Multi Commodity Exchange (MCX) in the initial trading hour of Monday morning against the previous close of ₹5,876, up by 1.21 per cent; and January futures were trading at ₹6,014 as against the previous close of ₹5,946, up by 1.14 per cent.

Keystone pipeline

In a statement posted on its Website, Canada’s TC Energy said teams from the company continue to actively investigate the cause of the incident. “We have not confirmed a timeline for re-start and will only resume service when it is safe to do so, and with the approval of the regulator,” it said.

An accident in Canada’s Keystone pipeline in the US has resulted in the closure of the pipeline. Following the accident, around 14,000 barrels of crude oil spilled into a creek in Kansas, which is equivalent to an Olympic swimming pool being filed with crude oil.

The pipeline, which has a capacity to transport 6,22,000 barrels a day of crude oil, ships heavy Canadian crude from Alberta to refiners in the US Midwest and the Gulf Coast. The shutdown of this pipeline is affecting the supply of Canadian crude to the US storage hub in Cushing, Oklahoma and to the Gulf.

Meanwhile, Russian President Vladimir Putin’s statement that his country could stop selling crude oil to any country that imposes a price cap on Russian oil also helped boost the price of the commodity. His statement follows the decision by the G7 nations to impose a price cap on the import of Russian crude oil. Russia is one of the major producers of crude oil.

Jeera flares up

December natural gas futures were trading at ₹569.40 on MCX in the initial trading hour of Monday morning against the previous close of ₹508.70, up by 11.93 per cent.

On the National Commodities and Derivatives Exchange (NCDEX), December jeera contracts were trading at ₹26,780 in the initial trading hour of Monday morning against the previous close of ₹26,200, up by 2.21 per cent.

December dhaniya futures were trading at ₹8,700 on NCDEX in the initial trading hour of Monday morning against the previous close of ₹8,840, down by 1.58 per cent.

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