Crude oil traded higher on Friday morning as the reports of G7 nations fixing a cap on Russian crude oil.
At 10 am on Friday, January Brent oil futures were at $85.65, up by 0.36 per cent, and January crude oil futures on WTI were at $78.44, up by 0.64 per cent.
December crude oil futures were trading at ₹6,432 on Multi Commodity Exchange (MCX) in initial trading against the previous close of ₹6,420, up by 0.19 per cent, and January futures were trading at ₹6,470 against the previous close of ₹6,464, up by 0.09 per cent.
Market reports said the G7 group of countries has been discussing a price cap of around $65-70 a barrel on Russian crude oil. This move may not impact the prices as the proposed price cap is higher than the current price of Urals. Market reports opined that with the price cap remaining above the price of Russian Urals, there may not be any retaliation by Russia on stopping the supply of crude oil.
China Covid cases a dampener
Another factor that helped the crude oil prices is the recent weakness in the dollar, as there were signals by the US Fed Reserve that there would be slower pace of interest rate hikes by it.
Though the above factors helped the crude oil prices to trade higher on Friday morning, the increase in the number of Covid cases in China created apprehensions over the demand for the commodity in the global market limiting its upward movement.
China reported 32,695 new cases of Covid on Thursday as against 31,444 on Wednesday. Reports said that Guangzhou and Chongqing recorded a bulk number of cases, and new cases have also been reported from Chengdu, Jinan, Lanzhou, Xian and Wuhan in China. The outbreak has made China intensify Covid control measures in that country, impacting the economy of that nation.
China is a major consumer of crude oil, and Covid control measures such as lockdowns make a huge impact on the economy of that country. This, in turn, brings down the demand for crude oil in the global market.
Mentha oil gains, jeera loses
December mentha oil futures were trading at ₹960.80 on MCX in initial trading against the previous close of ₹957.30, up by 0.37 per cent.
On the National Commodities and Derivatives Exchange (NCDEX), December cottonseed oilcake contracts were trading at ₹2,815 in initial trade against the previous close of ₹2,797, up by 0.64 per cent.
December jeera futures were trading at ₹23,880 on NCDEX in early trade against the previous close of ₹24,075, down by 0.81 per cent.