Crude oil futures traded higher on Monday morning as the supply side issues continued to impact the global market.
At 10.03 am, October Brent oil futures were at $101.88, up by 0.88 per cent; and October crude oil futures on WTI were at $94.24, up by 1.27 per cent.
September crude oil futures were trading at ₹7,555 on Multi Commodity Exchange (MCX) in early trade against the previous close of ₹7,414, up by 1.90 per cent; and October futures were trading at ₹7,515 as against the previous close of ₹7,376, up by 1.88 per cent.
Last week, a Bloomberg report quoted the Saudi Energy Minister, Prince Abdulaziz bin Salman, that OPEC (Organization of the Petroleum Exporting Countries) stands ready to cut output to correct price decline driven by poor futures market liquidity and macro-economic fears.
Quoting a source, a Reuters report on Friday mentioned that the other major oil producers such as the United Arab Emirates and Oman have also supported this move.
Any cut in production will impact the price as the global oil market is already facing tight supply situation.
Added to this, the clashes in Libya (a member of OPEC) led to the killing of 32 people over the weekend. Market players expressed concern that any full-blown conflict could impact the global supplies
In his outlook for the day, Prathamesh Mallya, AVP (Research, Non-Agri Commodities, and Currencies), Angel One Ltd, said crude oil prices are projected to remain elevated on improved demand and the ongoing supply bottleneck, while OPEC+ considers cutting output.
Meanwhile, the US Federal Reserve Chairman, Jerome Powell, on Friday highlighted the need for higher interest rates to control inflation despite the risk of a slow growth in the economy. A costlier dollar would make commodity buying more costlier.
Copper slips, guar gum up
September copper futures were trading at ₹667.35 on MCX in early trade against the previous close of ₹677.40, down by 1.48 per cent.
Saish Sandeep Sawant Dessai, Research Associate (Base Metals), Angel One Ltd, said: “We expect copper to trade lower towards ₹669 levels, a break of which could prompt the price to move lower to ₹659 levels.”
On the National Commodities and Derivatives Exchange (NCDEX), September guar gum futures were trading at ₹8,980 in the initial trading hour of Monday morning against the previous close of ₹8853, up by 1.43 per cent.
September jeera contracts were trading at ₹25,060 on NCDEX in the initial trading hour of Monday morning against the previous close of ₹25,475, down by 1.63 per cent.