Crude oil up as US inventory down by 17 million barrels

Crude oil futures traded marginally higher on Thursday morning as the data from the US EIA (Energy Information Administration) confirmed a massive decline in the crude oil inventories in the top consumer nation.

At 9.53 am on Thursday, October Brent oil futures were at $83.25, up by 0.06 per cent, and September crude oil futures on WTI (West Texas Intermediate) were at $79.53, up by 0.05 per cent.

August crude oil futures were trading at ₹6,577 on Multi Commodity Exchange (MCX) during initial trading against the previous close of ₹6,556, up by 0.32 per cent, and September futures were trading at ₹6,555 as against the previous close of ₹6,533, up by 0.34 per cent.

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Drop of 17 million barrels

US EIA’s petroleum status report for the week ending August 28 showed that the US commercial crude oil inventories (excluding those in the strategic petroleum reserve) decreased by 17 million barrels from the previous week.

At 439.8 million barrels, US crude oil inventories were approximately 1 per cent below the five-year average for this time of year.

Decline of 17 million barrels was the biggest draw of crude oil in the US after 1982. This huge decline in inventory indicated tightness in the supply of the commodity as some of the major producers decided to cut their production output during the year.

Meanwhile, the products supplied in the US over the last four-week period averaged 20.2 million barrels a day, up by 1.4 per cent from the same period last year. Over the past four weeks, motor gasoline product supplied averaged 8.8 million barrels a day, up by 3 per cent from the same period last year.

Also read: Nifty prediction today – August 3, 2023: On a support, but bias is bearish

OPEC meet tomorrow

US crude oil imports averaged 6.7 million barrels a day last week, an increase of 301,000 barrels a day from the previous week.

The market monitoring committee meeting of the OPEC (Organisation of the Petroleum Exporting Countries) and its allies, known as OPEC+, will be held on Friday. Market is expecting that Saudi Arabia, a major producer of crude oil, is likely to extend its voluntary production cut to the month of September also.

Though the rating agency Fitch downgraded the long-term foreign currency ratings of the US from AA+ to AAA, crude oil prices found support from the supply tightness and increase in the demand for the commodity in the key consuming markets such as US.

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Cottonseed oil cake, guar gum slip

August natural gas futures were trading at ₹206 on MCX against the previous close of ₹205.50, up by 0.24 per cent.

On the National Commodities and Derivatives Exchange (NCDEX), August cottonseed oilcake contracts were trading at ₹2,417 against the previous close of ₹2435, down by 0.74 per cent.

August guar gum futures were trading at ₹11,300 on NCDEX against the previous close of ₹11379, down by 0.69 per cent.

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