Crude oil down on ceasefire hopes in West Asia

Crude oil futures traded lower on Tuesday morning following the hopes for a ceasefire between Israel and Hamas in West Asia.

At 9.52 am on Tuesday, October Brent oil futures were at $77.05, down by 0.79 per cent, and October crude oil futures on WTI (West Texas Intermediate) were at $73.08, down by 0.79 per cent.

September crude oil futures were trading at ₹6144 on Multi Commodity Exchange (MCX) during the initial hour of trading on Tuesday against the previous close of ₹6190, down by 0.74 per cent, and October futures were trading at ₹6125 against the previous close of ₹6165, down by 0.65 per cent.

The US Secretary of State, Antony Blinken, said on Monday that the Prime Minister of Israel, Benjamin Netanyahu, has accepted a proposal for a ceasefire with Hamas.

In their Commodities Feed, ING Think’s Warren Patterson, Head of Commodities Strategy, and Ewa Manthey, Commodities Strategist, said this has helped ease some fears over supply risks hanging over the oil market. “However, we still need to see if Hamas will accept the deal, and if we get a deal, whether the ceasefire holds. Oil prices are likely to remain sensitive to how this evolves,” they said.

ING Think’s Commodities Feed said oil prices came under renewed pressure on Monday, and ICE Brent settled a little more than 2.5 per cent lower on the day.

Demand concerns centred around China continue to linger. Recent data releases, reinforce the view of weaker Chinese oil demand. Trade and industrial output numbers last week suggested that apparent oil demand continued to trend lower in July. These worries mean that speculators continue to be hesitant about jumping into the market, despite expectations for a deficit environment for the remainder of the year, they said.

Meanwhile, a Reuters report said that production at Libya’s Sharara oilfield has risen to about 85,000 barrels a day in a move aimed at supplying the Zawia oil refinery. Libya’s National Oil Corporation had declared force majeure on oil exports from the field on August 7 after a blockade by protesters hit production at the 300,000-barrels-a-day field, it said.

August natural gas futures were trading at ₹187.70 on MCX during the initial hour of trading on Tuesday against the previous close of ₹186.50, up by 0.64 per cent.

On the National Commodities and Derivatives Exchange (NCDEX), August cottonseed oilcake contracts were trading at ₹3165 in the initial hour of trading on Tuesday against the previous close of ₹3044, up by 3.98 per cent.

September jeera futures were trading at ₹25200 on NCDEX in the initial hour of trading on Tuesday against the previous close of ₹25275, down by 0.30 per cent.