Crude oil futures traded higher on Wednesday morning due to various supply side issues.

At 9.55 am on Wednesday, June Brent oil futures were at $89.01, up by 0.10 per cent, and May crude oil futures on WTI (West Texas Intermediate) were at $85.16, up by 0.01 per cent.

April crude oil futures were trading at ₹7,097 on Multi Commodity Exchange (MCX) during initial trading on Wednesday morning against the previous close of ₹7,077, up by 0.28 per cent, and May futures were trading at ₹7,049 against the previous close of ₹7,020, up by 0.41 per cent.

Continuing geopolitical tensions

Market reports said that the Ukraine continued with its drone attacks on Russian refinery infrastructure. Russia, which is a major crude oil producer in the global market, also exports a significant quantity of products to the international market. The recent attacks on its refinery infrastructure have affected its product output.

Continued tensions in the Middle East region are also creating apprehensions in the market over the crude oil supply situation. Iran said that it will seek to revenge against Israel for the recent airstrike. Israel’s airstrike killed some of its key military personnel at the Iranian embassy in Damascus.

Meanwhile, a Reuters report said Mexico’s energy company Pemex has asked its trading unit to cancel up to 436,000 barrels a day of crude exports in April.

The latest weekly report by the industry body American Petroleum Institute (API) showed decline in crude oil inventories in the US. According to API, crude oil inventories declined by 2.28 million barrels for the week ending March 29. Market was expecting the decline to be around 2 million barrels during the period.

Kapas, jeera dip

Added to this, the recent manufacturing PMI data from the US and China showed growth in these economies. These numbers indicated a recovery in the demand for commodities such as crude oil.

April natural gas futures were trading at ₹155.60 on MCX against the previous close of ₹156.60, down by 0.64 per cent.

On the National Commodities and Derivatives Exchange (NCDEX), April kapas contracts were trading at ₹1,538 against the previous close of ₹1,544.50, down by 0.42 per cent.

April jeera futures were trading at ₹23,800 on NCDEX against the previous close of ₹23,465, up by 1.43 per cent.

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