Crude oil futures traded lower as the market took stock of an increase in crude oil inventories and supplies in the US, and the rate hike by the US Fed.
At 10.03 am on Thursday, August Brent oil futures were at $119.38, down by 1.47 per cent; and July crude oil futures on WTI were at $116.09, up by 0.68 per cent.
June crude oil futures were trading at ₹9,052 on the Multi Commodity Exchange (MCX) in the initial hour of Thursday morning against the previous close of ₹9,148, down by 1.05 per cent, and July futures were trading at ₹8,888 as against the previous close of ₹8,986, down by 1.09 per cent.
Up 2 million barrels this week
The petroleum status report of the US Energy Information Administration (EIA) for the week ending June 10, which was released on June 15, mentioned that US commercial crude oil inventories (excluding those in the strategic petroleum reserve) increased by 2 million barrels from the previous week. At 418.7 million barrels, US crude oil inventories were about 14 per cent below the five-year average for this time of year.
The US crude oil imports averaged 7 million barrels a day last week, an increase of around 0.8 million barrels a day from the previous week. Over the past four weeks, crude oil imports averaged about 6.5 million barrels a day, 2.2 per cent more than the same four-week period last year.
Total products supplied in the US over the last four-week period averaged 19.8 million barrels a day, up by 2.3 per cent from the same period last year.
The decision of the US Fed to hike the interest rate by 75 basis points also exerted pressure on oil prices. The US Fed had taken this decision to curb surging inflation. A stronger dollar makes oil more expensive for holders of other currencies. This leads to decline in demand.
Zinc futures gain
June zinc futures were trading at ₹322.15 on MCX in the initial hour of Thursday morning against the previous close of ₹317.20, up by 1.56 per cent.
On the National Commodities and Derivatives Exchange (NCDEX), July steel long futures were trading at ₹46,200 in the initial hour of Thursday morning against the previous close of ₹46,000, up by 0.43 per cent.
July turmeric (farmer polished) contracts were trading at ₹7,930 on NCDEX in the initial hour of Thursday morning against the previous close of ₹8,024, down by 1.17 per cent.