Crude oil futures traded higher on Thursday morning following a huge decline in crude oil inventories in the US. Added to this, People’s Bank of China decided to reduce banks’ reserve ratio to support its economy.
At 9.54 am on Thursday, March Brent oil futures were at $80.28, up by 0.30 per cent, and March crude oil futures on WTI (West Texas Intermediate) were at $75.39, up by 0.40 per cent.
February crude oil futures were trading at ₹6274 on Multi Commodity Exchange (MCX) during initial trading against the previous close of ₹6253, up by 0.34 per cent, while the March futures were trading at ₹6294 as against the previous close of ₹6272, up by 0.35 per cent.
Down by 9.2 million barrels
Weekly petroleum status report by the US EIA (Energy Information Administration) showed a huge decline in the crude oil inventories for the week ending January 19.
According to EIA, US commercial crude oil inventories decreased by 9.2 million barrels from the previous week. At 420.7 million barrels, US crude oil inventories were about 5 per cent below the five-year average for this time of year. Market was expecting crude oil inventories to decline by 2.15 million barrels for the week ending January 19.
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However, the total motor gasoline inventories increased by 4.9 million barrels from last week and were about 1 per cent above the five-year average for this time of year.
Total products supplied in the US over the last four-week period averaged 19.5 million barrels a day, up by 3.3 per cent from the same period last year. Over the past four weeks, motor gasoline product supplied averaged 8.1 million barrels a day, up by 3.7 per cent from the same period last year.
US is a major consumer of crude oil in the global market. The recent data on US crude oil inventories and product supplies in that market boosted the market sentiments.
China has taken a decision to improve its struggling economy by reducing the banks’ reserve requirement ratio.
People’s Bank of China announced that it is making a 50 basis points cut in the amount of cash banks must hold as reserves with effect from February 5. This is the biggest cut in the last two years.
Jeera, turmeric lose lustre
Market reports said this move would infuse around $140 billion of cash into the banking system to help boost the Chinese economy. This development will also help boost the sentiments in the crude oil market as China is another major consumer of the commodity in the global market.
February natural gas futures were trading at ₹190.20 on MCX against the previous close of ₹185.80, up by 2.37 per cent.
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On the National Commodities and Derivatives Exchange (NCDEX), March jeera contracts were trading at ₹28,200 against the previous close of ₹28,350, down by 0.53 per cent.
April turmeric (farmer polished) futures were trading at ₹15,770 on NCDEX in the initial trading hour of Thursday morning against the previous close of ₹15,808, down by 0.24 per cent.