Crude oil traded marginally lower on Wednesday morning as industry data showed an increase in inventories in the US, indicating weak demand for the commodity.
At 10 am on Wednesday, February Brent oil futures were at $80.44, down by 0.30 per cent; and January crude oil futures on WTI were at $75.20, down by 0.25 per cent.
December crude oil futures were trading at ₹6,225 on Multi Commodity Exchange (MCX) in the initial trading hour of Wednesday morning against the previous close of ₹6,254, down by 0.46 per cent, and January futures were trading at ₹6,257 against the previous close of ₹6,278, down by 0.33 per cent.
Market reports quoting American Petroleum Institute (API) said there was an increase in crude oil inventories in the US, to the tune of 7.81 million barrels for the week ending December 9, against a decrease of 6.42 million barrels in the previous week. In fact, the market was expecting a decline in crude oil inventories to the tune of 3.91 million barrels for the week ending December 9.
An increase in crude oil inventories indicated there was weak demand for the commodity. However, data from the US Energy Information Administration (EIA) is expected later in the day, which will give a clear picture on crude oil inventories in the US.
Meanwhile, crude oil supplies to the US, which has been affected by an accident in Canada’s Keystone pipeline in the US last week, is yet to resume.
Canada’s TC Energy said in a media statement that vacuum trucks and crews continued to operate round the clock, and multiple booms were set up to prevent the oil spill moving downstream. Without providing much details on resumption of crude oil supplies, TC Energy’s statement said investigation is ongoing.
Around 14,000 barrels of crude oil spilled into a creek in Kansas due to the accident last week. The pipeline, which can transport 622,000 barrels a day of crude oil, transports heavy Canadian crude from Alberta to refiners in the US Midwest and the Gulf Coast.
The market is now waiting for the conclusion of a two-day meet of the US Fed Reserve later in the day. Market reports indicated the Fed may increase interest rates by 50 basis points in Wednesday’s meeting.
Guarseed gains, turmeric loses
December copper futures were trading at ₹711 on MCX in the initial trading hour of Wednesday morning against the previous close of ₹706.95, up by 0.57 per cent.
On the National Commodities and Derivatives Exchange (NCDEX), December guarseed contracts were trading at ₹5,844 in the initial trading hour of Wednesday morning, against the previous close of ₹5,803, up by 0.71 per cent.
December turmeric (farmer polished) futures were trading at ₹7,122 on NCDEX in the initial trading hour of Wednesday morning, against the previous close of ₹7,228, down by 1.47 per cent.