Crude oil futures traded higher on Thursday morning on tighter supply outlook in the coming months.

At 9.56 am on Thursday, October Brent oil futures were at $83.36, up by 0.97 per cent, and September crude oil futures on WTI (West Texas Intermediate) were at $79.67, up by 1.13 per cent.

August crude oil futures were trading at ₹6,532 on Multi Commodity Exchange (MCX) during initial trading against the previous close of ₹6,473, up by 0.91 per cent, and September futures were trading at ₹6,525 as against the previous close of ₹6472, up by 0.82 per cent.

Chinese stimulus plans

The recent announcements by the major oil producers to cut the production output and the plans of the Chinese government to boost economy of that nation by stimulus measures boosted the crude oil market.

Saudi Arabia and Russia have already announced their decision to reduce the production output for August. Market feels that these cuts may go beyond August and stretch to September also. This decision of the major producers may lead to the tightness in the supply of the commodity to the market boosting the price of crude oil.

A Chinese official had recently said measures would be formulated to restore and expand consumption in that country. This follows the weak economic indicators by China in the recent months. The proposed economic stimulus measures in that country will help boost demand for commodities such as crude oil. China is a major buyer of crude oil in the world market.

The US Federal Reserve’s decision to increase the interest rate by 25 basis points had impacted the crude oil prices on Wednesday. However, the US Federal Reserve had also hinted that there may not be a recession in the US.

Stocks 2% above 5-year average

Meanwhile, the crude oil inventories in the US declined during the week ending July 21. The petroleum status report by the US EIA (Energy Information Administration) for the week ending July 21 said the US commercial crude oil inventories (excluding those in the strategic petroleum reserve) decreased by 0.6 million barrels from the previous week. At 456.8 million barrels, US crude oil inventories were approximately 2 per cent above the five-year average for this time of year.

The report said the total products supplied over the last four-week period averaged 20.5 million barrels a day, up by 2.2 per cent from the same period last year.

Turmeric, cotton oilseed cake slip

August zinc futures were trading at ₹222.45 on MCX against the previous close of ₹219, up by 1.58 per cent.

On the National Commodities and Derivatives Exchange (NCDEX), August turmeric (farmer polished) contracts were trading at ₹13,870 against the previous close of ₹13,950, down by 0.57 per cent.

August cottonseed oilcake futures were trading at ₹2353 on NCDEX against the previous close of ₹2363, down by 0.42 per cent.

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