Crude oil futures decline on concern over increase in supply

Crude oil futures traded lower on Wednesday morning due to concerns over increasing supply in the market.

At 9.54 am on Wednesday, November Brent oil futures were at $73.36, down by 0.53 per cent, and October crude oil futures on WTI (West Texas Intermediate) were at $69.91, down by 0.61 per cent.

September crude oil futures were trading at ₹5,896 on Multi Commodity Exchange (MCX) during the initial hour of trading on Wednesday against the previous close of ₹5,919, down by 0.39 per cent, and October futures were trading at ₹5,863 against the previous close of ₹5,887, down by 0.41 per cent.

Market reports said that rival governments in Libya, which were fighting for the control over the central bank of that country, may close a deal soon. This dispute had triggered a blockade of the crude oil production in that country, leading to decline in oil production.

According to reports, the UN Support Mission in Libya was involved in the discussions to resolve the dispute over the control of central bank of that country. A deal on this issue would help resume crude oil production in that country, increasing supply to the world market.

A Reuters report said the total oil production in Libya, which was around 1.28 million barrels a day on July 20, declined to 591,000 barrels a day on August 28.

Oil prices came under pressure over the likely increase in the production output by some members of OPEC+ (Organization of the Petroleum Exporting Countries and its allies). A recent Reuters report said that some OPEC+ members are likely to start increasing their output from October.

Meanwhile, the Caixin China General Services PMI decreased to 51.6 in August from 52.1 in July. Market was expecting it to be around 52.2. China is a major consumer of crude oil in the market, and weak economic data from that country impacts the demand for the commodity.

September menthaoil futures were trading at ₹972 on MCX during the initial hour of trading on Wednesday against the previous close of ₹969.20, up by 0.29 per cent.

On the National Commodities and Derivatives Exchange (NCDEX), September jeera contracts were trading at ₹25,560 in the initial hour of trading on Wednesday against the previous close of ₹26,080, down by 1.99 per cent.

October turmeric (farmer polished) futures were trading at ₹13,460 on NCDEX in the initial hour of trading on Wednesday against the previous close of ₹13,432, up by 0.21 per cent.