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Concerns over supply-side constraints over the economic slowdown worldwide keeps the Brent crude oil futures above $100 a barrel on Friday morning.
At 10.05 am, the September Brent oil futures were at $104.81, up by 4.09 per cent; and August futures on WTI were at $103.06, down by 0.32 per cent.
July crude oil futures were trading at ₹8,214 on the Multi Commodity Exchange (MCX) in early trade against the previous close of ₹8,195, up by 0.23 per cent, and August futures at ₹7,987 as against the previous close of ₹7936, up by 0.64 per cent.
The demand decline in the US was visible when the US EIA (Energy Information Administration) released the petroleum status report for the week ending July 1.
Declining trend
According to the US EIA report released on July 7, the total products supplied over the last four-week averaged 20 million barrels a day, down by 4.4 per cent from the same period last year. Over the past four weeks, motor gasoline product supplied averaged 9 million barrels a day, down by 5.5 per cent from the same period last year. Distillate fuel product supplied averaged 3.9 million barrels a day over the past four weeks, down by 5.3 per cent from the same period last year. However, the jet fuel product supplied was up 15 per cent compared with the same four-week period last year.
It may be mentioned here that the major economies, including the US, had resorted to monetary tightening to control inflation in their countries. Market analysts were of the opinion that such a tightening could lead to a slowdown in the economy, and there could be a decline in the demand for commodities such as oil in the market.
Though the US commercial crude oil inventories (excluding those in the strategic petroleum reserve) increased by 8.2 million barrels from the previous week, the inventories were about 10 per cent below the five-year average for this time of year.
US crude oil refinery inputs averaged 16.4 million barrels a day during the week ending July 1, which was 228,000 barrels a day less than the previous week’s average.
Copper, guarseed, dhania gain
In spite of the concerns over the economic slowdown, crude oil prices remained still above 36 per cent during 2022 due to the tight supply situation. While some of the oil producers are finding it difficult to increase their production due to various factors in their countries, Russia (one of the major oil producers in the world) is facing sanctions from the US and other western nations over its war with Ukraine.
July copper futures were trading at ₹660.80 on MCX in the initial hour of Friday morning against the previous close of ₹664.85, down by 0.61 per cent.
On the National Commodities and Derivatives Exchange (NCDEX), July guarseed futures were trading at ₹5,128 in the initial hour of Friday morning against the previous close of ₹5,050, up by 1.54 per cent.
July dhaniya contracts were trading at ₹12,090 on NCDEX in the initial hour of Friday morning against the previous close of ₹11,952, up by 1.15 per cent.
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