Crude oil futures traded higher on Thursday morning following an increase in geopolitical risks. However, the rise in crude oil inventories in the US limited the gains.
At 9.54 am on Thursday, January Brent oil futures were at $73.01, up by 0.27 per cent, and January crude oil futures on WTI (West Texas Intermediate) were at $68.95, up by 0.29 per cent.
December crude oil futures were trading at ₹5835 on Multi Commodity Exchange (MCX) during the initial hour of trading on Thursday against the previous close of ₹5828, up by 0.12 per cent, and January futures were trading at ₹5837 against the previous close of ₹5822, up by 0.26 per cent.
Reports said that Ukraine attacked Russia with British Storm Shadow cruise missiles on Wednesday.
In their Commodities Daily feed, Warren Patterson, Head of Commodities Strategy of ING Think, and Ewa Manthey, Commodities Strategist, said oil prices edged lower on Wednesday despite growing geopolitical risks related to Russia and Ukraine. Having fired a US made missile into Russia earlier in the week, there are reports that Ukraine has now fired British made missiles into Russia.
“For oil, the risk is if Ukraine targets Russian energy infrastructure, while the other risk is uncertainty over how Russia responds to these attacks,” they said.
Meanwhile, the US has vetoed a resolution in the UN for a ceasefire in Gaza. Market players feel that this may lead to crude oil supply disruptions in West Asia.
The US EIA’s (Energy Information Administration) weekly petroleum status report showed an increase in the crude oil inventories in the US for the week ending November 15.
According to the report, US commercial crude oil inventories increased by 0.5 million barrels from the previous week. At 430.3 million barrels, US crude oil inventories were about 4 per cent below the five-year average for this time of year. Total motor gasoline inventories increased by 2.1 million barrels from last week and were about 4 per cent below the five-year average for this time of year.
Total products supplied in the US over the last four-week period averaged 20.7 million barrels a day, up by 1.2 per cent from the same period last year. Over the past four weeks, motor gasoline product supplied averaged 8.9 million barrels a day, up by 0.5 per cent from the same period last year.
December natural gas futures were trading at ₹289.80 on MCX during the initial hour of trading on Thursday against the previous close of ₹285.20, up by 1.61 per cent.
On the National Commodities and Derivatives Exchange (NCDEX), December cottonseed oilcake contracts were trading at ₹2728 in the initial hour of trading on Thursday against the previous close of ₹2702, up by 0.96 per cent.
December guarseed futures were trading at ₹5191 on NCDEX in the initial hour of trading on Thursday against the previous close of ₹5218, down by 0.52 per cent.