Crude oil traded higher on Wednesday morning as an industry report showed a decline in inventories in the US.
At 10.02 am on Wednesday, January Brent oil futures were up by 1.14 per cent at $83.98 and January crude oil futures on WTI were at $79.03, up by 1.06 per cent.
December crude oil futures were trading at ₹6,484 on the Multi Commodity Exchange (MCX) in the initial trading hour of Wednesday morning, against the previous close of ₹6,422, up by 0.97 per cent, and January futures were trading at ₹6,519 as against the previous close of ₹6,457, up by 0.96 per cent.
Market reports citing data from the American Petroleum Institute said there was a decline in crude oil inventories in the US to the tune of 7.85 million barrels last week, against the market expectation of a decline of around 2.48 million barrels. There was a decline of 4.81 million barrels in the previous week.
All eyes on OPEC+ meet
However, official data of petroleum status by the US EIA (Energy Information Administration) is scheduled to be released later in the day. This will give a clear picture about the demand and supply situation of crude oil in the US market. The US is a major consumer of crude oil in the global market.
Meanwhile, OPEC (the Organisation of Petroleum Exporting Countries) and its allies, known as OPEC+, is scheduled to meet on December 4 to discuss the crude oil output policy. Market reports indicate that OPEC+ may resort to further production cuts to tackle weakness in the market.
The data on November business activity in China was also not encouraging. China’s Composite Purchasing Managers’ Index (PMI) was at 47.1 for November, against 49 in October. One of the main reasons for this was the strict Covid control measures being followed in that country. China has been resorting to lockdowns to control the spread of Covid. This, in turn, has impacted the economy of that nation, affecting the demand for commodities such as crude oil in the global market.
However, the news of China’s plans to increase the vaccination of its senior citizens to control the spread of the disease amidst the growing public unrest in that country boosted the price of crude oil.
December natural gas futures were trading at ₹583 on MCX in the initial trading hour of Wednesday morning, against the previous close of ₹591.50, down by 1.44 per cent.
On the National Commodities and Derivatives Exchange (NCDEX), December steel long contracts were trading at ₹44,800 in the initial trading hour of Wednesday morning, against the previous close of ₹44,200, up by 1.36 per cent.
December jeera futures were trading at ₹24,510 on NCDEX in the initial trading hour of Wednesday morning, against the previous close of ₹24,690, down by 0.73 per cent.