Crude oil futures traded lower on Monday morning after witnessing their largest weekly gains last week due to escalating tensions in West Asia.
At 9.57 am on Monday, December Brent oil futures were at $77.75, down by 0.38 per cent, and November crude oil futures on WTI (West Texas Intermediate) were at $74.16, down by 0.30 per cent.
October crude oil futures were trading at ₹6,244 on Multi Commodity Exchange (MCX) during the initial hour of trading on Monday against the previous close of ₹6,339, down by 1.50 per cent, and November futures were trading at ₹6,205 against the previous close of ₹6,288, down by 1.32 per cent.
Market reports attributed the decline in price to profit-taking after a strong weekly gain.
Last week, Brent crude oil futures gained over 8 per cent on a weekly basis, and WTI futures gained 9.1 per cent. Escalation in conflicts in West Asia was one of the reasons for this. Iran launched a missile attack on Israel last week. Following this, Israel said it would retaliate for this attack. This created apprehensions in the market over possible supply disruptions from the West Asia region, as Iran is one of the major producers of crude oil.
However, the US President, Joe Biden, discouraged Israel from attacking Iran’s oil facilities. This helped ease concern over possible supply disruptions.
Added to this, spare crude oil production capacity in the OPEC (Organization of the Petroleum Exporting Countries) group also alleviated concerns over possible supply shortages in the market.
Libya, which is a member of OPEC, also restarted crude oil production last week. All these factors boosted the market sentiments of a smooth supply situation in the coming days.
October natural gas futures were trading at ₹236 on MCX during the initial hour of trading on Monday against the previous close of ₹240.30, down by 1.79 per cent.
On the National Commodities and Derivatives Exchange (NCDEX), October dhaniya contracts were trading at ₹7,176 in the initial hour of trading on Monday against the previous close of ₹7,270, down by 1.29 per cent.
October castor seed futures were trading at ₹6755 on NCDEX in the initial hour of trading on Monday against the previous close of ₹6,819, down by 0.94 per cent.