After losing more than 11 per cent on some of the major commodity exchanges over the last three sessions, crude oil traded higher on Thursday morning as the International Energy Agency (IEA) expressed optimism about an increase in the demand for crude oil in 2023.
At 9.57 am on Thursday, May Brent oil futures were at $74.28, up by 0.80 per cent, and April crude oil futures on WTI were at $68.12, up by 0.75 per cent.
March crude oil futures were trading at ₹5,643 on Multi Commodity Exchange (MCX) during initial trading against the previous close of ₹5,564, up by 1.42 per cent, and April futures were trading at ₹5,695 against the previous close of ₹5,614, up by 1.44 per cent.
IEA’s Oil Market Report for March 2023, released on Wednesday, said the world oil demand growth is set to accelerate sharply over the course of 2023, from 7,10,000 barrels a day in the first quarter of 2023 to 2.6 million barrels a day in the fourth quarter of 2023.
It said that the rebounding air traffic and the release of pent-up Chinese demand dominate the recovery.
The OPEC (Organization of Petroleum Exporting Countries) report, which was released on March 14, had forecast the world oil demand growth for 2023 at 2.3 million barrels a day. It had said that jet/kerosene and gasoline are leading the demand growth for China.
Meanwhile, official data from the US EIA (Energy Information Administration) on the petroleum status in the US for the week ending March 10, which was released on March 15, showed an increase in the crude oil inventories in the US.
For the week ending March 10, US commercial crude oil inventories (excluding those in the strategic petroleum reserve) saw an increase of 1.6 million barrels from the previous week. At 480.1 million barrels, US crude oil inventories were about 7 per cent above the five-year average for this time of year.
Market reports noted that the reports of an increase in crude oil inventories in recent weeks indicate a potential supply glut in the US. It may be mentioned here that the US is one of the major consumers of crude oil in the global market.
Crude oil prices witnessed a downward trend on the global exchanges during the last three sessions due to the panic in the global banking sector.
The failures of Silicon Valley Bank and Signature Bank in the US, and the recent troubles at the Swiss lender Credit Suisse led to concerns over the economic stability of the US and Europe. Any economic instability in these markets would impact the demand for commodities such as crude oil.
Guar gum, turmeric slip
March natural gas futures were trading at ₹208.30 on MCX during initial trading against the previous close of ₹203.40, up by 2.41 per cent.
On the National Commodities and Derivatives Exchange (NCDEX), March guar gum contracts were trading at ₹11,294 against the previous close of ₹11,764, down by 4 per cent.
April turmeric (farmer polished) futures were trading at ₹6,700 on NCDEX in the initial trading hour of Thursday morning against the previous close of ₹6,776, down by 1.12 per cent.
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.