Brent crude oil futures traded around $80 a barrel on Friday morning as the Chair of the US Fed Reserve, Jerome Powell, indicated that interest rates could rise further in the US.

At 9.52 am on Friday, January Brent oil futures were at $80.53, up by 0.65 per cent, and December crude oil futures on WTI (West Texas Intermediate) were at $76.12, up by 0.50 per cent.

November crude oil futures were trading at ₹6,337 on the Multi Commodity Exchange (MCX) in the initial trading hour of Friday morning, against the previous close of ₹6,372, down by 0.55 per cent, and December futures were trading at ₹6,359, as against the previous close of ₹6,391, down by 0.50 per cent.

Speaking at the research conference of the International Monetary Fund, Powell said the Fed is committed to achieving a monetary policy stance that is sufficiently restrictive to bring inflation down to 2 per cent over time. He said: “We are not confident that we have achieved such a stance.”

His comments were preceded by similar such hawkish indications from other Fed officials. His comments made the markets think that interest rates in the US will remain higher for longer.

A high interest rate scenario in the US is likely to impact the demand for crude oil in the global market as it makes dollar-denominated crude costlier for those holding other currencies.

The recent economic indicators from China were also not encouraging. On Thursday, China reported deflationary figures for October. Market reports noted that such indicators could impact the demand for crude oil in the global market as China is a major consumer of this commodity.

In addition to this, there has been a massive increase in crude oil inventories in the US, indicating a decline in demand for the commodity. The American Petroleum Institute’s (API) recent data release showed that crude oil inventories in the US increased by 11 million barrels for the week ending November 3. This figure was recorded at a time when the market was expecting inventories to decline by around 0.3 million barrels.

November natural gas futures were trading at ₹252.20 on MCX in the initial trading hour of Friday morning, against the previous close of ₹256.90, down by 1.83 per cent.

On the National Commodities and Derivatives Exchange (NCDEX), December jeera contracts were trading at ₹44,000 in the initial trading hour of Friday morning, against the previous close of ₹43,770, up by 0.53 per cent.

November castor seed futures were trading at ₹5,902 on NCDEX in the initial trading hour of Friday morning, against the previous close of ₹5,953, down by 0.86 per cent.

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