Both supply side and demand side constraints helped crude oil futures to trade higher in a narrow range on global exchanges on Thursday morning. Factors such as a drop in crude oil inventories in the US, Covid-induced lockdown in China, and the supply side constraints due to Russia-Ukraine war and Libyan unrest played their role in the price movements.

At the time of filing this report, June Brent oil futures were at $107.77, up by 0.48 per cent; and June crude oil futures on WTI were at $103.04, up by 0.83 per cent.

May crude oil futures were trading at ₹7881 on Multi Commodity Exchange (MCX) in the initial hour of Thursday morning against the previous close of ₹7857, up by 0.31 per cent; and June futures were trading at ₹7848 against the previous close of ₹7813, up by 0.45 per cent.

The Weekly Petroleum Status Report for the week ended April 15, which was released by the US Energy Information Administration (EIA) on April 20, showed that US commercial crude oil inventories (excluding those in the strategic petroleum reserve) decreased by 8 million barrels from the previous week. At 413.7 million barrels, US crude oil inventories were about 15 per cent below the five-year average for this time of year.

US crude oil imports averaged 5.8 million barrels a day during the week, down by 159,000 barrels a day from the previous week. Over the past four weeks, US crude oil imports averaged about 6.1 million barrels a day, 3.1 per cent more than the same four-week period last year, the EIA report said.

China, a major consumer of crude oil, has been affected by the Covid outbreak in some regions. Following this, some parts of China are under lockdown to control the spread of Covid. This has led to the decline in demand for crude oil from that country.

Libya, which is a member of Organization of Petroleum Exporting Countries (OPEC), has been facing protests against the Prime Minister, Abdul Hamid Dbeibah, making an impact on the crude oil production and loading of the cargo from that country. Reports said that these factors have led to the decline in crude oil production by more than half a million barrels a day.

Added to this, the production in Russia, a major oil producer, has come down due to the Russia-Ukraine war and subsequent sanctions on it by the US, the UK and some European countries. These developments have made an impact in the global oil market, which has already been facing tight supply of crude oil.

May natural gas futures were trading at ₹530.50 on MCX in the initial hour of Thursday morning against the previous close of ₹540.80, down by 1.90 per cent.

NCDEX

On the National Commodities and Derivatives Exchange (NCDEX), May turmeric (farmer polished) futures were trading at ₹9026 in the initial hour of Thursday morning against the previous close of ₹8824, up by 2.29 per cent.

May steel long futures were trading at ₹58200 on NCDEX in the initial hour of Thursday morning against the previous close of ₹58450, down by 0.43 per cent.