Crude oil futures gained in early trade on Friday morning as Russia and Saudi Arabia asked OPEC (Organisation of the Petroleum Exporting Countries) and its allies, known as OPEC+, members to adhere to production output cuts.
At 9.56 am on Friday, February Brent oil futures were at $75.26, up by 1.63 per cent; and January crude oil futures on WTI (West Texas Intermediate) were at $70.38, up by 1.50 per cent.
December crude oil futures were trading at ₹5,881 on the Multi Commodity Exchange (MCX) in the initial trading hour of Friday morning, against the previous close of ₹5,802, up by 1.36 per cent; and January futures were trading at ₹5,928, as against the previous close of ₹5,850, up by 1.33 per cent.
Following talks between Russian President Vladimir Putin and the Crown Prince of Saudi Arabia, Mohammed bin Salman Al Saud, a report in the Russian news agency TASS said: “In the field of energy, the two sides commended the close cooperation between them and the successful efforts of the OPEC+ countries in enhancing the stability of global oil markets.”
The two parties “stressed the importance of continuing this cooperation, and the need for all participating countries to adhere to the OPEC+ agreement in a way that serves the interests of producers and consumers and supports the growth of the global economy”.
However, crude oil is set to lose more than 5 per cent during the current week, due to a decline in demand and increase in global supplies.
China, a major consumer of crude oil, reported a decline in demand during November. ING Think’s Commodities Feed said crude oil imports in China dropped 9.2 per cent year-on-year to 42.4 million tonnes (mt) in the month. It attributed the decline to demand from refineries, weak economic indicators, and higher inventories. China imported around 49 mt of crude oil in October, it said.
Several recent economic indicators have indicated sluggishness in China’s economic recovery.
The latest weekly petroleum status report by the US EIA (Energy Information Administration) shows an increase in gasoline inventories. Total motor gasoline inventories increased by 5.4 million barrels in the US for the week ending December 1.
Added to this, domestic crude oil production in the US remained at around 13.1 million barrels a day for the week ending December 1.
Factors such as an increase in gasoline inventories and domestic crude oil production indicated a decline in consumption in the biggest consuming market for crude oil.
December natural gas futures were trading at ₹216.20 on MCX in the initial trading hour of Friday morning, against the previous close of ₹214.80, up by 0.65 per cent.
On the National Commodities and Derivatives Exchange (NCDEX), January steel long contracts were trading at ₹46,610 in the initial trading hour of Friday morning, against the previous close of ₹44,350, up by 5.10 per cent.
January jeera futures were trading at ₹36,580 on NCDEX in the initial trading hour of Friday morning, against the previous close of ₹37,180, down by 1.61 per cent.