Crude oil futures ruled steady on Wednesday morning in anticipation of major decisions in the US that could impact the price of the commodity. These include a likely hike in interest rates in the US and the release of the weekly petroleum status report by the US EIA (Energy Information Administration) later in the day.

At 10.02 am on Wednesday, September Brent oil futures were at $104.40, down by 0.71 per cent, and September crude oil futures on WTI were at $95.22, up by 0.25 per cent.

August crude oil futures were trading at ₹7,625 on Multi Commodity Exchange (MCX) in the initial hour of Wednesday morning against the previous close of ₹7,665, down by 0.52 per cent, and September futures were trading at ₹7,485 as against the previous close of ₹7,522, down by 0.49 per cent.

Controlling inflation

The meeting of the US Federal Reserve, which is scheduled for Wednesday, is likely to announce a major increase in the interest rates. Market analysts feel that the US wants to control inflation with this proposed move. However, such a move could lead to a recession in the US affecting the demand for fuels.

Meanwhile, the US has also decided to sell additional 20 million barrels from its strategic oil reserves in an effort to bring down the prices of fuel.

Market players are also waiting for the release of the weekly petroleum status report by the US EIA later in the day to get an idea about the demand and supply situation of crude oil in the US market.

A Reuters report, which cited the data of the industry body American Petroleum Institute (API), said that the crude oil stockpiles in the US dropped by 4 million barrels last week. However, a poll by Reuters had estimated the US crude oil stockpile declined by 1 million barrels. Official data from US EIA will give a clear picture of this.

Russia’s decision to reduce gas supplies to Europe helped maintain upward pressure on crude oil prices. It may be mentioned here that Russia has decided to limit the supply of gas to Germany through Nord Steam 1 pipeline to 20 per cent of the capacity. Such a move will lead to an increase in the consumption of crude oil in the European market, as the countries will have to move from gas to crude oil to meet their energy requirements.

Jeera rises, cottonseed oil cake slips

August natural gas futures were trading at ₹701.50 on MCX in the initial hour of Wednesday morning against the previous close of ₹703.70, down by 0.31 per cent.

On the National Commodities and Derivatives Exchange (NCDEX), August jeera futures were trading at ₹23,800 in the initial hour of Wednesday morning against the previous close of ₹23,650, up by 0.63 per cent.

August cottonseed oilcake contracts were trading at ₹2,786 on NCDEX in the initial hour of Wednesday morning against the previous close of ₹2,807, down by 0.75 per cent.

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