Crude oil futures traded higher on Tuesday morning following concerns over the supply situation in the global markets.
At 10.04 am on Tuesday, August Brent oil futures were quoted at $115.26, up by 1.89 per cent, and August crude oil futures on WTI were at $110.11, up by 1.96 per cent.
July crude oil futures were trading at ₹8,618 on Multi Commodity Exchange (MCX) in the initial hour of Tuesday morning against the previous close of ₹8,504, up by 1.34 per cent; and August futures were trading at ₹8,462 as against the previous close of ₹8,358, up by 1.24 per cent.
The Russia-Ukraine war has affected the crude oil supply in the global market as Russia is a major producer of crude oil. The US, UK and other western nations have imposed a ban on the import of Russian crude oil due to its war with Ukraine. The global crude oil market, which was already facing tight supply situation, was further affected with this move.
In addition to this, some members of OPEC (Organization of the Petroleum Exporting Countries) and its allies are finding it difficult to increase production due to various factors. While the global economies are recovering post-Covid that boosts the demand for the crude oil, the tight supply situation has ledto an increase in its price.
Meanwhile, many countries have started raising interest rates to curb the inflation. Last week, the US Fed Reserve increased the interest rate by 75 basis points. Market analysts fear that such rate hikes could slowdown the economy thereby affecting the demand prospects for crude oil.
July natural gas futures were trading at ₹526 on MCX in the initial hour of Tuesday morning against the previous close of ₹521.70, up by 0.82 per cent.
On the National Commodities and Derivatives Exchange (NCDEX), July castorseed futures were trading at ₹7,246 in the initial hour of Tuesday morning against the previous close of ₹7,224, up by 0.30 per cent.
July steel long contracts were trading at ₹47,000 on NCDEX in the initial hour of Tuesday morning against the previous close of ₹47,200, down by 0.42 per cent.