Crude oil futures traded higher on Wednesday morning as data from an industry body showed a decline in US crude oil inventories. However, Chinese demand concerns and the prospects of interest rate hikes in the US limited gains in the market.

At 9.54 am on Wednesday, October Brent oil futures were at $84.14, up by 0.13 per cent, and October crude oil futures on WTI (West Texas Intermediate) were at $79.80, up by 0.20 per cent.

September crude oil futures were trading at ₹6,628 on the Multi Commodity Exchange (MCX) in the initial trading hour of Wednesday morning, against the previous close of ₹6,641, down by 0.20 per cent, and October futures were trading at ₹6,630, as against the previous close of ₹6,643, down by 0.20 per cent.

Factors reining in prices

According to the industry body American Petroleum Institute (API), crude oil inventories in the US declined by 2.4 million barrels for the week ending August 18. The market was expecting the decline to be in the range of around 2.9 million barrels.

Official data by the US EIA (Energy Information Administration) on crude oil inventories in the US is expected later in the day.

Further gains in the market were reined in by prospects of an interest rate hike in the US and weak demand prospects for crude oil in China.

In its efforts to control inflation, the US Federal Reserve has been hiking interest rates over the past several months. The US is a major consumer of crude oil in the global market. Any hike in interest rates makes the commodity pricier in the market, hurting demand.

In such a situation, the market expects cues from the US Federal Reserve on further rate hikes at the annual symposium of central bankers at Jackson Hole in the US this week.

Officials from the Federal Reserve and the European Central Bank, the Bank of England, and the Bank of Japan will attend the symposium.

Meanwhile, recent economic indicators from China have created concerns over demand for crude oil in that country. China is a major consumer of crude oil in the global market. Despite concerns over an economic revival, China is yet to take major policy initiatives to boost growth. These factors are affecting the price of crude oil also.

Mentha oil tops ₹1,000

August mentha oil futures were trading at ₹1,005 on MCX in the initial trading hour of Wednesday morning, against the previous close of ₹996.60, up by 0.84 per cent.

On NCDEX, jeera (cumin) October futures tumbled by ₹1,170 a quintal to ₹58,215. Turmeric December futures dropped by ₹580 a quintal to ₹16,328.

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