Though crude oil futures ruled steady on Friday morning, the move by China to relax Covid restrictions has revived the hopes of demand for crude oil in the global market.

At 9.47 am on Friday, July Brent oil futures were at $111.24, up by 1.95 per cent, and July crude oil futures on WTI were at $108.80, down by 0.99 per cent.

June crude oil futures were trading at ₹8,447 on Multi Commodity Exchange (MCX) in the initial hour of Friday morning against the previous close of ₹8,464, down by 0.20 per cent; and July futures were trading at ₹8,246 against the previous close of ₹8,261, down by 0.18 per cent.

Reports noted that authorities in Shanghai, one of the major cities affected by Covid restrictions, have relaxed some restrictions in the region in the past two months. The market hopes that further relaxations would help boost the demand for crude oil as China is a major crude oil consumer in the world.

No impact of price flare-up

Market reports also noted that the high fuel prices in the US have not affected the people using the vehicles in that country.

In his crude oil outlook for the day, Rahul Kalantri, VP (Commodities) of Mehta Equities Ltd, said oil prices rebounded from two days of losses in a very highly volatile session on Thursday. This was bolstered by weakness in the dollar and expectations that China could ease some lockdown restrictions that could boost demand.

In the international markets, WTI crude settled at $109.89 per barrel and Brent settled at $111.52 per barrel. Domestic market also settled on a positive note at ₹8,464 per barrel, up by 1.73 per cent. He said the dollar index fell around 1 per cent after downbeat US economic data supported global commodity prices.

Crude oil prices also recovered amid a revival in Chinese oil demand. The possibility of easing of Covid restrictions in the most populous city of China from June 1 could lift Chinese oil demand. Crude oil prices were also supported by a possible ban on Russian oils by the European Unions. The US oil demand is also increasing and gasoline prices hit record highs this week, he said.

“We expect crude oil prices to remain volatile in today’s session as the US President Joe Biden could meet Saudi Arabia’s Mohammed bin Salman as early as next month, according to sources. Crude oil is having support at $106.20-$104.40 and resistance at $110.40-$112.65, In rupee terms, crude oil has support at ₹8,250-8,120 and resistance at ₹8,550-8,640,” he said.

June natural gas futures were trading at ₹633.20 on MCX in the initial hour of Friday morning against the previous close of ₹660, down by 4.06 per cent.

Castor seed, dhaniya gain

On the National Commodities and Derivatives Exchange (NCDEX), June castor seed futures were trading at ₹7,630 in the initial hour of Friday morning against the previous close of ₹7,544, up by 1.14 per cent. June dhaniya contracts were trading at ₹11,520 on NCDEX in the initial hour of Friday morning against the previous close of ₹11,444, up by 0.66 per cent.

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