Crude oil futures traded higher on Friday morning as the US announced plans to replenish its strategic petroleum reserves.
At 9.53 am on Friday, December Brent oil futures were at $93.25, up by 0.94 per cent; and December crude oil futures on WTI (West Texas Intermediate) were at $89.31, up by 1.06 per cent.
November crude oil futures were trading at ₹7435 on Multi Commodity Exchange (MCX) in the initial trading hour of Friday morning against the previous close of ₹7330, up by 1.43 per cent; and December futures were trading at ₹7335 as against the previous close of ₹7246, up by 1.23 per cent.
The US Department of Energy has indicated that it will buy 6 million barrels of crude oil that should be delivered between December and January. Market reports said the US Department of Energy will sign purchase contracts for the refill at $79 a barrel or less.
The US had drawn around 200 million barrels from its strategic petroleum reserves since 2022 following the war between Russia and Ukraine. The war led to increase in the price of fuel products. The US government’s move to draw crude oil from reserves was aimed at controlling the fuel prices in the US then. Market reports also noted that the storage in the reserves had reached a 40-year low following this drawdown.
In its Commodities Feed, ING Think referred to the decline in the crude oil inventories (excluding the strategic oil reserves) in the US for the week ending October 13. It said that crude oil inventories continue to edge lower at a time when they should be building, whilst stocks are also a little more than 20 million barrels below the five-year average.
It said Chinese macro data released this week also came in stronger than expected. Domestic demand in China remains robust coming in at around 15.2 million barrels a day, up 3 per cent month on month and 5 per cent higher year on year, it said.
Market also remained cautious following a blast in a hospital in Gaza. There are apprehensions that other neighbouring countries in the region could intervene in the war if the situation escalates. Such developments could lead to further tightness in the crude oil supplies in the global market.
October natural gas futures were trading at ₹244.30 on MCX in the initial trading hour of Friday morning against the previous close of ₹245.80, down by 0.61 per cent.
On the National Commodities and Derivatives Exchange (NCDEX), November castorseed contracts were trading at ₹6048 in the initial trading hour of Friday morning against the previous close of ₹6006, up by 0.70 per cent.
December turmeric (farmer polished) futures were trading at ₹13450 on NCDEX in the initial trading hour of Friday morning against the previous close of ₹13692, down by 1.77 per cent.