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Crude oil futures traded higher on Friday morning as the minutes of the meeting of the US Federal Open Market Committee (FOMC) indicated interest rate cuts in 2024.
At 9.52 am on Friday, March Brent oil futures were at $77.93, up by 0.44 per cent; and February crude oil futures on WTI (West Texas Intermediate) were at $72.67, up by 0.66 per cent.
January crude oil futures were trading at ₹6,060 on the Multi Commodity Exchange (MCX) in the initial trading hour of Friday morning, against the previous close of ₹6,034, up by 0.43 per cent; and February futures were trading at ₹6,091 as against the previous close of ₹6,067, up by 0.40 per cent.
The minutes of the FOMC meeting highlighted that inflation is under control in the US, and raised concern about the risks that an ‘overly restrictive’ monetary policy may hold for the economy.
Though the minutes of the meeting did not directly indicate the scale and the timing of interest rate cuts, the market is expecting the US Fed Reserve to begin interest rate cuts from March.
A reduction in interest rates will bring down borrowing costs. This will, in turn, help increase demand for commodities such as crude oil.
US gasoline inventories rise
Meanwhile, the latest weekly petroleum status report indicated a substantial increase in gasoline inventories in the US.
The weekly petroleum status report by the US EIA (Energy Information Administration) for the week ending December 29 showed that total motor gasoline inventories in the US increased by 10.9 million barrels from last week. This was slightly above the five-year average for this time of year.
However, US commercial crude oil inventories decreased by 5.5 million barrels from the previous week.
US crude oil imports averaged 6.9 million barrels a day last week, an increase of 619,000 barrels a day from the previous week. Over the past four weeks, crude oil imports have averaged about 6.6 million barrels a day, 7 per cent more than the same four-week period last year.
January natural gas futures were trading at ₹232.10 on MCX in the initial trading hour of Friday morning, against the previous close of ₹235.90, down by 1.61 per cent.
On the National Commodities and Derivatives Exchange (NCDEX), January jeera contracts were trading at ₹34,490 in the initial trading hour of Friday morning, against the previous close of ₹33,165, up by 4 per cent.
January dhaniya futures were trading at ₹7,098 on NCDEX in the initial trading hour of Friday morning, against the previous close of ₹7,048, up by 0.71 per cent.
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