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Crude oil traded higher on Tuesday morning as the market expected an improvement in fuel demand in the US ahead of the Memorial Day weekend in that country.
At 9.55 am on Tuesday, July Brent oil futures were at $76.25, up by 0.34 per cent, and July crude oil futures on WTI were at $72.33, up by 0.39 per cent.
June crude oil futures were trading at ₹6,009 on Multi Commodity Exchange (MCX) during initial trading against the previous close of ₹6,017, down by 0.13 per cent, and July futures were trading at ₹6,022 as against the previous close of ₹6,034, down by 0.20 per cent.
Drop in inventories
Gasoline futures traded higher prior to the Memorial Day holiday on May 29 in the US. Usually, Memorial Day marks the beginning of peak summer fuel demand season in the US. The recent official data showed a decline in gasoline inventories in the US, indicating a demand for the fuel.
In addition to this, supply disruptions in Canada due to the wildfires in oil producing Alberta region also hinted that the supply situation is going to be tight in the days to come.
Further, increase in the crude oil futures was limited as Monday evening’s discussion between US President Joe Biden and Republican House Speaker Kevin McCarthy to raise the US government’s $31.4 trillion debt ceiling remained inconclusive. However, both parties agreed to continue the discussions.
Markets fear that a default by the US government could impact the economy of that country. Any slowdown in the economy, in turn, may bring down the demand for commodities such as crude oil. It may be mentioned here that the US is a major crude oil buyer in the global market.
Jeera, turmeric lose
June natural gas futures were trading at ₹211.90 on MCX during initial trading against the previous close of ₹211.40, up by 0.24 per cent.
On the National Commodities and Derivatives Exchange (NCDEX), June jeera contracts were ₹44,340 against the previous close of ₹44,645, down by 0.68 per cent.
June turmeric (farmer polished) futures were trading at ₹7,850 on NCDEX against the previous close of ₹7,928, down by 0.98 per cent.
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