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Crude oil futures traded higher on Monday morning following Saudi Arabia’s decision to reduce the production output by one million barrels a day from July.
At 9.55 am on Monday, August Brent oil futures were at $76.99, up by 1.13 per cent; and July crude oil futures on WTI were at $72.66, up by 1.28 per cent.
June crude oil futures were trading at ₹6,004 on Multi Commodity Exchange (MCX) in the initial trading hour of Monday morning against the previous close of ₹5,916, up by 1.49 per cent; and July futures were trading at ₹6,027 as against the previous close of ₹5,941, up by 1.45 per cent.
- Also read: Crude Check: Unfavourable risk-reward
Announcing the decision to reduce production output at the OPEC+ meeting in Vienna on Sunday, the Saudi Arabian Energy Minister, Prince Abdulaziz bin Salman, said his country would do whatever was necessary to bring stability to the market. With this announcement, Saudi’s oil production level will come down to around nine million barrels a day from July.
Saudi Arabia is a major member of the Organisation of Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+. Market fears that Saudi’s decision to reduce production output would lead to a tighter market in the second half of 2023.
Russia, which is another major member of OPEC+, has not made any commitments on the production output cuts. However, Sunday’s meeting of OPEC+ allowed United Arab Emirates (UAE) to increase production output targets for 2024.
June menthaoil futures were trading at ₹941 on MCX in the initial trading hour of Monday morning against the previous close of ₹950.30, down by 0.98 per cent.
On the National Commodities and Derivatives Exchange (NCDEX), June isabgol seed contracts were trading at ₹23,800 in the initial trading hour of Monday morning against the previous close of ₹24,000, down by 0.83 per cent.
June jeera futures were trading at ₹45,460 on NCDEX in the initial trading hour of Monday morning against the previous close of ₹44,765, up by 1.55 per cent.
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