Fears of recession and tighter supplies led crude oil futures to rule within ranges on Tuesday morning.

At 10.02 am on Tuesday, December Brent oil futures were at $92.07, up by 0.49 per cent, and November crude oil futures on WTI were at $85.96, up by 0.59 per cent.

October crude oil futures were trading at ₹7,082 on the Multi Commodity Exchange (MCX) in the initial trading hour of Tuesday morning, against the previous close of ₹7,080, up by 0.03 per cent; and November futures were trading at ₹7,047, as against the previous close of ₹7039, up by 0.11 per cent.

High inflation across several economies in the world has led to fears that it could lead to a recession in several countries. While many major economies have already increased their interest rates over the past few months to control inflation, some of them are thinking of further hikes in the days to come. Any recession in the economy will lead to a decline in the demand for crude oil.

Escalation of Ukraine war

However, the market also expects tighter crude oil supplies in the days to come.

OPEC (the Organisation of Petroleum Exporting Countries) and its allies, known as OPEC+, will resort to production output cuts to the tune of 2 million barrels a day from November.

Escalation in the war between Russia and Ukraine is further likely to impact the supply of crude oil, as Russia is one of the major producers in the global market. Added to this, sanctions on Russian oil imports by the European Union will start in December.

Market analysts also felt that a harsher-than-expected winter in Europe could lead to additional demand for energy. All these factors are likely to support crude oil prices.

Cottonseed oilcake gains

October natural gas futures were trading at ₹488.70 on the MCX in the initial trading hour of Tuesday morning, against the previous close of ₹495.40, down by 1.35 per cent.

On the National Commodities and Derivatives Exchange (NCDEX), December cottonseed oilcake contracts were trading at ₹2,412 in the initial trading hour of Tuesday morning, against the previous close of ₹2,408, up by 0.17 per cent.

October guar gum futures were trading at ₹8,875 on NCDEX in the initial trading hour of Tuesday morning, against the previous close of ₹8,991, down by 1.29 per cent.

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