Crude oil futures traded lower on Wednesday morning after industry data showed an increase in inventories in the US for the week ending October 25. Additionally, the market is awaiting the results of the US presidential election.
At 9.53 am on Wednesday, January Brent oil futures were at $74.77, down by 1.01 per cent, and December crude oil futures on WTI (West Texas Intermediate) were at $71.35, down by 0.89 per cent.
November crude oil futures were trading at ₹6,014 on the Multi Commodity Exchange (MCX) during the initial hour of trading on Wednesday, against the previous close of ₹6,054, down by 0.66 per cent, and December futures were trading at ₹5,998, against the previous close of ₹6,036, down by 0.63 per cent.
According to the industry body American Petroleum Institute (API), crude oil inventories increased by 3.13 million barrels for the week ending October 25 against a decline of around 0.57 million barrels in the previous week.
Official data on crude oil inventory levels in the US is expected to be released by the US EIA (Energy Information Administration) later on Wednesday.
Meanwhile, Hurricane Rafael in the US threatened oil production in the Gulf of Mexico. This hurricane is likely to impact the production output in the US.
Market is waiting the results of the presidential election in the US where Donald Trump and Kamala Harris are in the race.
In their Commodities Daily feed, Warren Patterson, Head of Commodities Strategy of ING Think, and Ewa Manthey, Commodities Strategist, said oil prices have held relatively steady as markets await the outcome of the US election, in what is expected to be a very close race.
ICE Brent settled above $75 a barrel on Tuesday with a weaker dollar likely supporting the market. “Oil will likely be vulnerable to broader moves in markets as we get more clarity on how the US election plays out. For oil fundamentals, a Trump victory could provide some short-term upside, with the risk of stricter sanction enforcement against Iran. However, in the medium to longer term, a Trump victory could be more bearish for oil due to trade and foreign policy. Meanwhile, a Harris victory would likely keep the status quo,” they said.
November zinc futures were trading at ₹282.95 on MCX during the initial hour of trading on Wednesday, against the previous close of ₹287.85, down by 1.70 per cent.
On the National Commodities and Derivatives Exchange (NCDEX), November jeera contracts were trading at ₹23650 in the initial hour of trading on Wednesday against the previous close of ₹23885, down by 0.98 per cent.
November dhaniya futures were trading at ₹7236 on NCDEX in the initial hour of trading on Wednesday, against the previous close of ₹7214, up by 0.30 per cent.