Crude oil futures, which gained more than 4 per cent on Monday, traded lower on Tuesday morning as the markets analysed the potential impact of Israel and Hamas war on the crude oil market.
At 9.52 am on Tuesday, December Brent oil futures were at $87.75, down by 0.45 per cent, and November crude oil futures on WTI (West Texas Intermediate) were at $85.94, down by 0.51 per cent.
October crude oil futures were trading at ₹7,170 on Multi Commodity Exchange (MCX) in the initial trading hour of Tuesday morning against the previous close of ₹7184, down by 0.19 per cent, and November futures were trading at ₹7,041 as against the previous close of ₹7,056, down by 0.21 per cent.
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Both Brent and WTI crude futures gained more than 4 per cent on Monday following the attack by Hamas on Israel. This attack increased the geopolitical risk in the Middle East, which is a major oil-producing region in the world.
Supplies may tighten
Market reports said Israel produces very little oil. However, a continued war between Israel and Hamas could impact the crude oil supply from the West Asia to the world market. It could aggravate the supply tightness in the market.
Market reports also noted that the current war situation in the West Asia could also impact the plans of the US to broker a peace deal between Saudi Arabia and Israel. Allegations of Iran’s involvement in attack on Israel may lead to the tightening of sanctions by the US.
Quoting sources, a Reuters report said that talks between Venezuela and the US have progressed and that could provide relief from sanctions to Venezuela. This may help at least one additional foreign oil firm to take crude from Venezuela oil under some conditions, it said.
October natural gas futures were trading at ₹278.70 on MCX in the initial trading hour of Tuesday morning against the previous close of ₹281.30, down by 0.92 per cent.
On NCDEX, guarseed December contracts gained 1.21 per cent at ₹5,775 a quintal, while guar gum November futures were up by 1.05 per cent at ₹11,567 a quintal.