Crude oil prices moved in a narrow range on Monday in the global market with the truce between the Saudi-led coalition and the Houthis group backed by Iran, besides the release of crude strategic petroleum reserves by some major consumers restricting the movement.

At the time of filing this report, June Brent oil futures were at $104.59, up by 0.19 per cent; and May crude oil futures on WTI were at $99.28, up by 0.01 per cent. April crude oil futures were trading at ₹7,535 on Multi Commodity Exchange (MCX) in the initial hour of Monday morning against the previous close of ₹7,559, down by 0.32 per cent; and May futures were trading at ₹7,469 against the previous close of ₹7,488, down by 0.25 per cent.

Last week, the United Nations had announced a two-month truce between the Houthis and the Saudi-led coalition. The attack on the oil facilities in Saudi Arabia coming by Houthis had added to the supply disruptions in the global oil market that is already affected by sanctions on Russia — a major oil producer.

In a press statement on April 1, the UN special envoy for Yemen, Hans Grundberg, announced a two-month truce. His statement said the parties accepted to halt all offensive military air, ground and maritime operations inside Yemen and across its borders.

They also agreed for fuel ships to enter Hudaydah ports and commercial flights to operate in and out of Sana’a airport to predetermined destinations in the region. They further agreed to meet under his auspices to open roads in Taiz and other governorates in Yemen.

“The truce can be renewed beyond the two-month period with the consent of the parties,” he said, adding, “During these two months, I plan to intensify my work with the parties with the aim to reach a permanent ceasefire, address urgent economic and humanitarian measures and resume the political process between the Yemeni parties.”

All Yemeni women, men and children that have suffered immensely through over seven years of war expect nothing less than an end to this war, he added.

The US move to rein in prices

Meanwhile, the US formally announced its plans to release around 1 million barrels of oil per day for six months from its strategic petroleum reserves. The move was aimed at bringing down the prices of oil in the market. The Russia-Ukraine war had led to an increase in the price of crude oil in the global market as Russia is one of the major crude oil producers in the world.

Added to this, the increase in the number of Covid cases in Shanghai, one of the major cities in China, also raised concerns in the oil market. Some market reports were of the view that the increase in the number of Covid cases could affect the demand for crude oil.

In his crude oil outlook for the day, Rahul Kalantri, VP (Commodities) of Mehta Equities Ltd, said oil prices fell at the start of Asian trade on Monday after the UAE and the Iran-aligned Houthi group welcomed a truce that would halt military operations on the Saudi-Yemeni border, alleviating some concerns about potential supply issues.

He said the early losses this week come after oil prices settled down around 13 per cent last week — their biggest weekly fall in two years — when the US President, Joe Biden, announced the largest-ever US oil reserves release. Member countries of the International Energy Agency (IEA) committed to another coordinated oil release in an extraordinary meeting, he said.

“We expect crude oil prices to remain volatile to negative in today’s session. Crude oil is having support at $94.40-$92.10 and resistance is at $101.20-104.50, In rupee terms, crude oil has support at ₹7,380-7,220; while resistance is at ₹7,820-8,050,” he said.

April zinc futures were trading at ₹358.65 on MCX in the initial hour of Monday morning against the previous close of ₹356.10, up by 0.72 per cent.

Dhaniya up, steel down

On the National Commodities and Derivatives Exchange (NCDEX), April dhaniya contracts were trading at ₹12,088 in the initial hour of Monday morning against the previous close of ₹11,796, up by 2.48 per cent.

April steel long futures were trading at ₹57,210 on NCDEX in the initial hour of Monday morning against the previous close of ₹58,330, down by 1.92 per cent.