Crude oil futures traded higher on Wednesday morning as the US is expecting its crude oil production to remain steady during the year.
At 9.54 am on Wednesday, April Brent oil futures were at $78.75, up by 0.20 per cent, and March crude oil futures on WTI (West Texas Intermediate) were at $73.52, up by 0.29 per cent.
February crude oil futures were trading at ₹6113 on Multi Commodity Exchange (MCX) during initial trading against the previous close of ₹6084, up by 0.48 per cent, and March futures were trading at ₹6138 against the previous close of ₹6113, up by 0.41 per cent.
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Record high output in Dec
In its short-term energy outlook, the US EIA (Energy Information Administration) said the US crude oil production reached an all-time high in December of more than 13.3 million barrels a day. However, crude oil production fell to 12.6 million barrels a day in January because of shut-ins related to cold weather. “We forecast production will return to almost 13.3 million barrels a day in February but then decrease slightly through the middle of 2024 and will not exceed the December 2023 record until February 2025,” it said.
On prices, it said the Brent crude oil spot price increased in January, averaging $80 a barrel because of heightened uncertainty about global oil shipments as attacks to vessels in the Red Sea intensified.
“Although we expect crude oil prices will rise into the mid-$80 a barrel range in the coming months, we expect downward price pressures will emerge in the second quarter of 2024 as global oil inventories generally increase through the rest of our forecast. However, ongoing risks of supply disruptions in the Middle East create the potential for crude oil prices to be higher than our forecast,” it said.
Now the market is waiting for the release of the weekly petroleum status report by EIA later in the day to get a clear picture on crude oil inventories in the US.
Data by the American Petroleum Institute (API) showed increase in the crude oil inventories for the week ending February 2. According to API, crude oil inventories increased by 0.67 million barrels during the period. Market was expecting crude oil inventories to go up by 2.13 million barrels during the period.
Meanwhile, the US Secretary of State, Antony Blinken, is scheduled to visit Israel later in the day to discuss a potential ceasefire between Israel and Hamas.
Dhaniya, turmeric sizzle
Crude oil prices had come down last week following the prospects of a ceasefire between Israel and Hamas. War between Israel and Hamas had led to further conflicts in the Middle East region. Market felt that the escalation of tension in the region would disrupt crude oil supplies to the global market.
February natural gas futures were trading at ₹169.20 on MCX against the previous close of ₹170.20, down by 0.59 per cent.
On the National Commodities and Derivatives Exchange (NCDEX), April dhaniya contracts were trading at ₹7824 against the previous close of ₹7794, up by 0.38 per cent.
April turmeric (farmer polished) futures were trading at ₹15,498 on NCDEX against the previous close of ₹15,532, down by 0.22 per cent.