Crude oil traded higher on Tuesday morning as market analysts felt that OPEC (Organisation of Petroleum Exporting Countries) and its allies, known as OPEC+, may resort to further production cuts following weakening demand prospects for the commodity.

At 10 am on Tuesday, January Brent oil futures were up by 1.97 per cent at $84.83 and January crude oil futures on WTI were at $78.41, a gain of 1.51 per cent.

December crude oil futures were trading at ₹6,448 on the Multi Commodity Exchange (MCX) in the initial trading hour of Tuesday morning, against the previous close of ₹6,340, up by 1.70 per cent; and January futures were trading at ₹6,482 as against the previous close of ₹6,378, up by 1.63 per cent.

Brent crude oil futures, which touched an 11-month low of $81.16 on Monday, bounced back following market analysts’ reports of a possible production cut by OPEC+ in its forthcoming meeting.

On Monday, Brent crude touched an 11-month low following weakening demand prospects on the back of Covid-related unrest in China (a major consumer of crude oil).

OPEC+, in its meeting in October, decided to implement a 2-million barrels-a-day production cut from November.

Reports quoting two members of the US Fed Reserve said more interest rate hikes are likely in the US to control inflation in that country. Such a move would put further pressure on the US economy, impacting the demand for commodities.

Guar gum, jeera gain

December natural gas futures were trading at ₹601 on the MCX in the initial trading hour of Tuesday morning, against the previous close of ₹589.50, up by 1.95 per cent.

On the National Commodities and Derivatives Exchange (NCDEX), December guar gum contracts were trading at ₹12,730 in the initial trading hour of Tuesday morning, against the previous close of ₹12,133, up by 4.92 per cent.

December jeera futures were trading at ₹24,715 on NCDEX in the initial trading hour of Tuesday morning, against the previous close of ₹24,320, up by 1.62 per cent.

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