Crude oil futures traded higher on Tuesday morning as Russia intensified its attack on Ukraine.
At 9.55 am on Tuesday, February Brent oil futures were at $72.69, up by 0.29 per cent, and January crude oil futures on WTI (West Texas Intermediate) were at $69.19, up by 0.36 per cent.
December crude oil futures were trading at ₹5,844 on Multi Commodity Exchange (MCX) during the initial hour of trading on Tuesday against the previous close of ₹5,826, up by 0.31 per cent, and January futures were trading at ₹5,835 against the previous close of ₹5,816, up by 0.33 per cent.
Quoting the statement of Vitali Klitschko, Mayor of Kyiv in Ukraine, a Reuters report said Kyiv was under the drone attack from Russia on Tuesday. He said drones entered Kyiv from different directions.
The recent decision of the US to allow Ukraine to use US-made weapons deep inside Russia has increased the tension between Russia and Ukraine. Russia had recently warned of strict retaliatory measures for this move.
Russia is a major oil producing nation. The market fears that an increase in hostilities between Russia and Ukraine could disrupt crude oil supplies from the region.
However, the ceasefire talks between Israel and Hezbollah and Donald Trump’s move to impose import tariff on Mexico and Canada limited further gains in the price of the commodity.
The Ambassador of Israel in the US on Monday said a peace deal could be reached within days. However, it is to be seen whether Hezbollah, which is backed by Iran, will accept the deal. Market players believe that de-escalation in tensions in West Asia region would ease concerns over potential crude oil supply disruptions.
Oil prices also faced pressure from a stronger dollar after Donald Trump, President-elect of the US, stated that he would sign an executive order imposing a 25 per cent import tariff on all products coming from Mexico and Canada over the claims of illegal immigrants entering the US through these countries. A stronger dollar makes commodities such as crude oil expensive for international buyers, thereby affecting demand.
December natural gas futures were trading at ₹288.10 on MCX during the initial hour of trading on Tuesday against the previous close of ₹292.50, down by 1.50 per cent.
On the National Commodities and Derivatives Exchange (NCDEX), December dhaniya contracts were trading at ₹8,000 in the initial hour of trading on Tuesday against the previous close of ₹8,028, down by 0.35 per cent.
December cottonseed oilcake futures were trading at ₹2,688 on NCDEX in the initial hour of trading on Tuesday against the previous close of ₹2,679, up by 0.34 per cent.