Crude oil futures traded higher on Thursday morning as the market continued to analyse the impact of Donald Trump’s victory in the US Presidential election.
At 9.55 am on Thursday, January Brent oil futures were at $75.44, up by 0.69 per cent, and December crude oil futures on WTI (West Texas Intermediate) were at $72.14, up by 0.63 per cent.
November crude oil futures were trading at ₹6096 on the Multi Commodity Exchange (MCX) during the initial hour of trading on Thursday against the previous close of ₹6075, up by 0.35 per cent, and December futures were trading at ₹6070 against the previous close of ₹6051, up by 0.31 per cent.
Market analysts feel that the Trump administration could stimulate economic growth in the US. This could help boost consumption demand in that country. Market players are also of the opinion that Trump could impose more sanctions on Iran and Venezuela. This, in turn, could reduce oil supply to the global market.
On Wednesday, Warren Patterson, Head of Commodities Strategy of ING Think, and Ewa Manthey, Commodities Strategist, said in their Commodities Daily feed that a Trump victory could provide some short-term upside, with the risk of stricter sanction enforcement against Iran. However, in the medium to longer term, a Trump victory could be more bearish for oil due to trade and foreign policy.
The market is also keenly watching how Trump will handle China. In his previous administration, Trump had followed tough trade policies with China. China is a major buyer of crude oil in the global market, and Trump administration’s policies towards this country can play significant role in shaping Chinese oil demand.
Meanwhile, crude oil inventories in the US increased for the week ending November 1. US EIA’s (Energy Information Administration) weekly petroleum status report for the week ending November 1 said the US commercial crude oil inventories increased by 2.1 million barrels from the previous week. At 427.7 million barrels, US crude oil inventories were about 5 per cent below the five-year average for this time of year. Total motor gasoline inventories increased by 0.4 million barrels from last week and were about 2 per cent below the five-year average for this time of year.
Total products supplied over the last four-week period averaged 20.6 million barrels a day, down by 1.5 from the same period last year. Over the past four weeks, motor gasoline product supplied averaged 8.9 million barrels a day, down by 1.5 per cent from the same period last year.
November zinc futures were trading at ₹281.70 on MCX during the initial hour of trading on Thursday, against the previous close of ₹278.55, up by 1.13 per cent.
On the National Commodities and Derivatives Exchange (NCDEX), November jeera contracts were trading at ₹25110 in the initial hour of trading on Thursday, against the previous close of ₹24805, up by 1.23 per cent.
November dhaniya futures were trading at ₹7074 on NCDEX in the initial hour of trading on Thursday, against the previous close of ₹7178, down by 1.45 per cent.