Crude oil futures pared their losses on Tuesday morning after the Organization of Petroleum Exporting Countries (OPEC) warned that it would not be possible to increase supplies due to the Russia-Ukraine war.

At 10.30 am, the June Brent oil futures were at $100.23, down by 2.48 per cent, and May crude oil futures on WTI were at $95.97, up by 1.78 per cent.

April crude oil futures were trading at ₹7,305 on Multi Commodity Exchange (MCX) in the early trade against the previous close of ₹7,176, up by 1.80 per cent; and May futures were trading at ₹7,306 against the previous close of ₹7,177, up by 1.80 per cent.

7 mbd loss per day

On Monday, the representatives of the European Union (EU) conducted a meeting with the OPEC officials in Vienna to discuss the issues related to the crude oil supply to the global market. Crude oil supplies have been impacted due to sanctions on Russia, a major oil producer.

Quoting the speech of the OPEC Secretary-General, Mohammad Barkindo, at the meeting, a Reuters report said: “We could potentially see the loss of more than 7 million barrels per day (mbd) of Russian oil and other liquids exports, resulting from current and future sanctions or other voluntary actions. Considering the current demand outlook, it would be nearly impossible to replace a loss in volumes of this magnitude.”

This development has taken place at a time when some member countries of EU are planning to impose sanctions on Russian oil imports.

$ will cap gains

In his crude oil outlook for the day, Rahul Kalantri, VP (Commodities) of Mehta Equities Ltd, said oil futures rose early on Tuesday, reversing sharp losses from the prior day, as the market weighed the potential for more sanctions on Russia’s energy sector, besides the OPEC warning

On Monday, Oil prices dropped by $4 a barrel, with Brent crude tumbling below $100 on plans to release record volumes of crude oil from strategic stocks and on continuing coronavirus lockdowns in China. WTI crude settled at $94.29 per barrel and Brent settled at $99.27 per barrel. Domestic markets were also ended on a weaker note at ₹7,176 per barrel, down by 2.76 per cent.

“We expect crude oil prices may show some recovery from yesterday’s fall in today’s session but gains will be capped by strong dollar and the US bond yields. Crude oil is having support at $93.20-$91.50 and resistance at $98.20–100.50, In rupee terms crude oil has support at ₹7,040-6,920; while resistance is at ₹7,380–7,550,” he said.

April natural gas futures were trading at ₹518.90 on MCX in the early trade against the previous close of ₹501.70, up by 3.43 per cent.

Steel loses sheen

On the National Commodities and Derivatives Exchange (NCDEX), April dhaniya futures were trading at ₹12,550 in the initial hour of Tuesday morning against the previous close of ₹12,420, up by 1.05 per cent.

May steel long contracts were trading at ₹53,700 on NCDEX in the initial hour of Tuesday morning against the previous close of ₹54,260, down by 1.03 per cent.

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