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The proposal of European Union to phase out Russian oil imports within six months helped crude oil futures trade higher on global exchanges on Thursday morning.
At the time of filing this report, July Brent oil futures were at $110.67, down by 5.43 per cent; and June crude oil futures on WTI were at $108.16, up by 0.32 per cent.
May crude oil futures were trading at ₹8242 on Multi Commodity Exchange (MCX) in the initial hour of Thursday morning against the previous close of ₹8225, up by 0.21 per cent; and June futures were trading at ₹8159 against the previous close of ₹8132, up by 0.33 per cent.
On Wednesday, the President of European Commission, Ursula von der Leyen, proposed a package of sanctions against Russia for its war in Ukraine.
The proposal includes phasing out of import of Russian crude oil in six months, and refined products by the end of 2022.
It also proposed to ban all shipping, brokerage, insurance and financing services offered by EU companies for the transport of Russian oil within a month.
However, this proposal needs to be agreed by all the 27 member countries of EU. Some member countries are worried that such a move would impact them.
According to market reports, EU imports around 3.5 million barrels a day of oil and products from Russia. It would be difficult for some member countries to find alternatives to these supplies at a time when the energy market is already facing tight supply situation.
Meanwhile, the Organization of the Petroleum Exporting Countries (OPEC) and its allies, which are scheduled to meet later on Thursday, are expected to stick to their plans to raise production targets by 432,000 barrels a day for June.
The Weekly Petroleum Status Report of the US EIA (Energy Information Administration) for the week ending April 29, which was released on May 4, said that the US crude oil imports averaged 6.3 million barrels a day for the week, up by 397,000 barrels per day from the previous week. Over the past four weeks, crude oil imports averaged about 6 million barrels a day, 3.3 per cent more than the same four-week period last year.
It said that US commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 1.3 million barrels from the previous week. At 415.7 million barrels, US crude oil inventories are about 15 per cent below the five-year average for this time of year, it said.
May natural gas futures were trading at ₹655.20 on MCX in the initial hour of Thursday morning against the previous close of ₹641, up by 2.22 per cent.
NCDEX
On the National Commodities and Derivatives Exchange (NCDEX), May cottonseed oilcake futures were trading at ₹2885 in the initial hour of Thursday morning against the previous close of ₹2869 up by 0.56 per cent.
May turmeric (farmer polished) contracts were trading at ₹8206 on NCDEX in the initial hour of Thursday morning against the previous close of ₹8176, up by 0.37 per cent.
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