Crude oil futures traded lower on Thursday morning as the US Federal Reserves signalled one more interest rate hike during this year. However, the Fed kept the rates unchanged in its Wednesday’s meeting.
At 10 a.m. on Thursday, November Brent oil futures were at $92.89, down by 0.68 per cent; and November crude oil futures on WTI (West Texas Intermediate) were at $88.95, down by 0.79 per cent.
October crude oil futures were trading at ₹7393 on Multi Commodity Exchange (MCX) in the initial trading hour of Thursday morning against the previous close of ₹7475, down by 1.10 per cent; and November futures were trading at ₹7317 as against the previous close of ₹7394, down by 1.04 per cent.
On Wednesday, the Federal Open Market Committee meeting of the US Federal Reserve kept the interest rates unchanged. Sticking to its hawkish stance, it signalled one more interest rate hike by the end of 2023.
Market feels that another interest rate hike could impact the economic growth and affect the demand for commodities such as crude oil. Such interest rate hikes will make dollar stronger. A stronger dollar makes crude oil costlier for those using other currencies.
Apart from the US Fed, other central banks such as Bank of England and Bank of Japan are also likely to announce their interest rate decisions during this week.
Meanwhile, latest weekly petroleum status report by the US EIA (Energy Information Administration) showed a decline in crude oil inventories in the US for the week ending September 15. According to the report, US commercial crude oil inventories decreased by 2.1 million barrels from the previous week. At 418.5 million barrels, US crude oil inventories were about 3 per cent below the five-year average for this time of year. It did not come as a surprise as the market was expecting a decline in the inventories.
Total products supplied in the US over the last four-week period averaged 20.9 million barrels a day, up by 6.8 per cent from the same period last year.
September menthaoil futures were trading at ₹927 on MCX in the initial trading hour of Thursday morning against the previous close of ₹924.40, up by 0.28 per cent.
On the National Commodities and Derivatives Exchange (NCDEX), October guargum contracts were trading at ₹12130 in the initial trading hour of Thursday morning against the previous close of ₹12083 up by 0.39 per cent.
October castor seed futures were trading at ₹6143 on NCDEX in the initial trading hour of Thursday morning against the previous close of ₹6123, up by 0.33 per cent.