Crude oil futures traded lower on Monday morning as the market expects the OPEC+ (Organization of the Petroleum Exporting Countries and its allies) to increase production output from October.
At 9.54 am on Monday, November Brent oil futures were at $76.33, down by 0.78 per cent, and October crude oil futures on WTI (West Texas Intermediate) were at $73, down by 0.75 per cent.
September crude oil futures were trading at ₹6140 on Multi Commodity Exchange (MCX) during the initial hour of trading on Monday against the previous close of ₹6203, down by 1.02 per cent, and October futures were trading at ₹6081 against the previous close of ₹6143, down by 1.01 per cent.
Quoting OPEC sources, a Reuters report said eight OPEC+ members are scheduled to boost output by 180,000 barrels a day in October, as part of a plan to begin unwinding their most recent layer of output cuts of 2.2 million barrels per day while keeping other cuts in place until end-2025.
In their Commodities Feed, ING Think’s Warren Patterson, Head of Commodities Strategy, and Ewa Manthey, Commodities Strategist, said the ICE Brent November contract settled 2.4 per cent lower on Friday. They said the catalyst for the move appears to be reports that OPEC+ members are leaning towards sticking to their plan and gradually unwinding cuts from October.
Given lingering demand concerns there had been a growing part of the market who thought the group would delay any supply increases. The group may believe that supply disruptions from Libya provide an opportunity to increase supply, they said.
Stating that the Libyan supply disruption has continued, Commodities Feed said output has been cut further in some fields.
Mentioning that three oil fields -- Sarir, Messla and Nafoura -- are restarting output, the Commodities Feed said: “It is not clear whether the resumption of operations at these fields signals progress in negotiations between Libya’s Western and Eastern governments. However, there are some suggestions that the restarting of these fields is to meet domestic demand rather than exports.”
China’s manufacturing PMI data also impacted the sentiments in the crude oil market on Monday morning. According to the National Bureau of Statistics of China, the official manufacturing PMI of that country fell to 49.1 in August from 49.4 in July. It was below the market forecast of 49.5. The official data was released over the weekend.
September natural gas futures were trading at ₹182.50 on MCX during the initial hour of trading on Monday against the previous close of ₹179, up by 1.96 per cent.
On the National Commodities and Derivatives Exchange (NCDEX), October turmeric (farmer polished) contracts were trading at ₹13838 in the initial hour of trading on Monday against the previous close of ₹13426, up by 3.07 per cent.
September jeera futures were trading at ₹25995 on NCDEX in the initial hour of trading on Monday against the previous close of ₹25710, up by 1.11 per cent.