Crude oil futures traded higher on Friday morning as markets paid more attention to economic and supply-related issues such as US trade tariffs and OPEC’s July meeting than geopolitical issues such as tensions between Iran-Israel.
At 9.53 am on Friday, September Brent oil futures were at $67.14, up by 0.67 per cent, and August crude oil futures on WTI (West Texas Intermediate) were at $65.66, up by 0.64 per cent. July crude oil futures were trading at ₹5,630 on Multi Commodity Exchange (MCX) during the initial hour of trading on Friday against the previous close of ₹5,625, up by 0.09 per cent, and August futures were trading at ₹5,531 against the previous close of ₹5,528, up by 0.05 per cent.
Oil prices surged on Monday after the US bombed nuclear sites in Iran. However, the prices declined after US President Donald Trump announced a ceasefire between Israel and Iran. Oil prices remained steady following the de-escalation of tensions between Israel and Iran. These events led to price swing of $15 a barrel in a week.
In their Commodities Feed for Friday, Warren Patterson, Head of Commodities Strategy of ING Think, and Ewa Manthey, Commodities Strategist, said nuclear talks between the US and Iran are set to resume next week. However, there are doubts over how successful these talks will be.
Assuming the ceasefire holds between Israel and Iran, the market might turn its focus to other drivers. US Secretary of Commerce Howard Lutnick said that the US and China have finalised a trade agreement that was crafted last month in Geneva. He also expects trade agreements to be reached with 10 major trading partners soon. This is constructive for the market, particularly ahead of the reciprocal tariff deadline of 9 July, they said.
The other focus is what OPEC+ decides on production levels for August. The group will make a decision on July 6. “We’re of the view that the group will continue to aggressively unwind supply cuts and announce another supply hike of 411,000 barrels a day for August. These supply hikes should ensure that the oil market moves into a large surplus towards the end of the year. This assumes we don’t see a re-escalation in the Middle East, which would lead to supply losses,” they said.
July natural gas futures were trading at ₹305.30 on MCX during the initial hour of trading on Friday against the previous close of ₹300.90, up by 1.46 per cent.
On the National Commodities and Derivatives Exchange (NCDEX), August turmeric (farmer polished) contracts were trading at ₹14250 in the initial hour of trading on Friday against the previous close of ₹14000, up by 1.79 per cent.
July cottonseed oilcake futures were trading at ₹3,119 on NCDEX in the initial hour of trading on Friday against the previous close of ₹3,138, down by 0.61 per cent.