Brent crude oil futures headed towards $80 a barrel in early trade on Wednesday following signs of a drop in Russian crude oil output.

At 9.52 am on Wednesday, September Brent oil futures were at $79.45, up by 0.06 per cent, and August crude oil futures on WTI (West Texas Intermediate) were at $74.89, up by 0.08 per cent.

July crude oil futures were trading at ₹6,163 on Multi Commodity Exchange (MCX) during initial trading against the previous close of ₹6158, up by 0.08 per cent, and August futures were trading at ₹6,173 against the previous close of ₹6,171, up by 0.03 per cent.

Impact of Saudi’s decision

A Bloomberg report, which cited the vessel tracking data, said shipments through Russia’s western ports in the four weeks to July 9 dropped substantially. Russia is one of the major suppliers of crude oil to Asian markets.

The market is expecting tighter supplies of crude oil following the recent decision of Saudi Arabia to extend its production output cut by 1 million barrels a day for August also. Saudi is a major producer of crude oil.

Market reports that quoted the Chinese government-backed China Securities Journal noted that China is likely to announce some stimulus measures to boost the economy in that country. Recent economic indicators showed China’s post-pandemic economic recovery is not gaining pace despite several measures by its government.

China is a major consumer of crude oil. The market expects that stimulus measures will boost the economy, which, in turn, will help boost the demand for crude oil.

US inventories rise: API data

Meanwhile, data from the industry body American Petroleum Institute showed an increase in the crude oil inventories in the US for the week ending July 7. Data showed crude oil inventories went up by 3.02 million barrels for the week ending July 7. However, there was a decline of 4.38 million barrels for the week ending June 30. Official data from the US EIA (Energy Information Administration) is expected later in the day.

July copper futures were trading at ₹721.80 on MCX in the initial trading hour of Wednesday morning against the previous close of ₹718.50, up by 0.46 per cent.

On the National Commodities and Derivatives Exchange (NCDEX), July steel long contracts were trading at ₹46,060 in initial trade against the previous close of ₹45,800, up by 0.57 per cent.

July guarseed futures were trading at ₹5,510 on NCDEX against the previous close of ₹5.546, down by 0.65 per cent.

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