Crude oil futures traded higher on Friday morning on reports of the G7 countries agreeing to put a price cap on Russian crude oil exports.
At 10 am on Friday, January Brent oil futures were at $95.41, up by 0.78 per cent, and December crude oil futures on WTI were at $88.90, up by 0.83 per cent.
November crude oil futures were trading at ₹7,347 on the Multi Commodity Exchange (MCX) in the initial trading hour of Friday morning, against the previous close of ₹7,341, up by 0.08 per cent, and December futures were trading at ₹7,287 against the previous close of ₹7,283, up by 0.05 per cent.
Targeting Russian revenues
Quoting sources, a Reuters report said the G7 nations and Australia have agreed to set a fixed price when they finalise a price cap on Russian oil later this month.
The price cap plan calls for participating countries to deny insurance, finance, brokering, navigation and other services to oil cargoes priced above the price cap on crude and oil products.
The price cap is aimed at reducing Russia’s oil revenues following its war with Ukraine. However, market analysts expressed apprehensions over the effectiveness of the cap as the major Asian countries, which are important oil consumers in the global market, have not shown any indication to agree with the proposed price cap.
However, the upward price momentum was limited by the increase in interest rates in the US and other economies.
As reported earlier, the US Fed Reserve in its meeting on Wednesday decided to increase in the interest rate from 3.25 per cent to 4 per cent, an increase of 75 basis points, to control inflation in that country. Added to this, other central banks in different parts of the world also announced their decision to increase interest rates in their countries. Market analysts feel that further rate hikes may lead to global economic slowdowns impacting the demand for crude oil.
Guar gum, zinc gain
November zinc futures were trading at ₹257.40 on the MCX in the initial trading hour of Friday morning, against the previous close of ₹253.55, up by 1.52 per cent.
On the National Commodities and Derivatives Exchange (NCDEX), November guar gum contracts were trading at ₹9,413 in the initial trading hour of Friday morning, against the previous close of ₹9,391, up by 0.23 per cent.
November steel long futures were trading at ₹46,910 on NCDEX in the initial trading hour of Friday morning, against the previous close of ₹47,230, down by 0.68 per cent.