After touching almost $101 a barrel on Tuesday, Brent crude futures started to gain on Wednesday. However, it was down by around 8 per cent during initial trading hours on Wednesday morning. Market analysts felt that supply concerns overtook the worries over recession leading to a bounce back on Wednesday.

At 10.03 am on Wednesday, September Brent oil futures were at $103.66, down by 8.67 per cent; and August crude oil futures on WTI were at $100.03, up by 0.53 per cent.

July crude oil futures were trading at ₹7,929 on Multi Commodity Exchange (MCX) in the initial hour of Wednesday morning against the previous close of ₹7,781, up by 1.90 per cent; and August futures were trading at ₹7,727 as against the previous close of ₹7,592, up by 1.78 per cent.

Highlighting the supply tightness in the crude oil market at an energy conference in Nigeria on Tuesday, Mohammad Barkindo, Secretary General of OPEC (Organization of the Petroleum Exporting Countries), said the oil industry is now facing huge challenges along multiple fronts.

“And these threaten our investment potential now and in the long term. To put it bluntly, the oil and gas industry is under siege,” he said. Barkindo referred to the recent geopolitical developments in Europe following the Russia-Ukraine war for this. This has made energy prices to go up.

Iran, Venezuela issues

However, he said, the oil producers can unlock resources and strengthen capacity, if the oil produced by Iran and Venezuela are allowed to return to the market. Sanctions on these countries have limited the supply of the commodity.

He said the decisions of a few nations to divest from the hydrocarbons have put additional strain on the crude oil production. While there is a decline in the investments in oil production capacity, the prices are going up, he said.

Added to this, the US and other western nations have imposed sanctions on crude oil imports from Russia for its war with Ukraine. This has affected the supply situation in the crude oil market even further.

Copper, castorseed drop

July copper futures were trading at ₹638.80 on MCX in the initial hour of Wednesday morning against the previous close of ₹651..25, down by 1.91 per cent.

On the National Commodities and Derivatives Exchange (NCDEX), July guar gum futures were trading at ₹9,580, up by 0.63 per cent, in the initial hour of Wednesday morning against the previous close of ₹9,641.

July castorseed contracts were trading at ₹7,300, down by 1.06 per cent, on NCDEX in the initial hour of Wednesday morning against the previous close of ₹7,378.

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