Crude oil prices were set for a fourth week of gains due to increased demand during summer in the US, and concerns over possible supply disruptions due to geopolitical factors. However, crude oil futures traded lower on Friday morning.
At 9.52 am on Friday, September Brent oil futures were at $87.17, down by 0.30 per cent, and August crude oil futures on WTI (West Texas Intermediate) were at $83.74, down by 0.38 per cent.
July crude oil futures were trading at ₹6,989 on the Multi Commodity Exchange (MCX) during initial trading on Friday morning, against the previous close of ₹7,024, down by 0.50 per cent, and August futures were trading at ₹6,930, against the previous close of ₹6,964, down by 0.49 per cent.
There was thin trading and no settlement in WTI following the holiday in the US on Thursday.
Rise in US summer travel
Crude oil prices were trading above 3 per cent for the week. One of the reasons for this was the increase in summer travel in the US.
Recently, the American Automobile Association had said that US holiday travel is expected to grow by 5.2 per cent during this summer season. The association had forecast that car travel alone will grow by 4.8 per cent in this travel season.
Added to this, recent data by the US EIA (Energy Information Administration) showed a huge decrease in crude oil inventories to the tune of 12.2 million barrels for the week ending June 28. Total motor gasoline inventories also declined 2.2 million barrels. The market expects crude oil inventories to decline this week also due to holidays in the US.
Meanwhile, geopolitical tensions in West Asia also supported crude oil prices as the market felt that further escalation in tensions would lead to supply disruptions from the region. Recent reports said Israel had killed of a senior Hezbollah commander. This prompted Hezbollah to retaliate near the border.
Guar gum gains, jeera dips
July mentha oil futures were trading at ₹980 on the MCX, against the previous close of ₹968.10, up by 1.23 per cent.
On the National Commodities and Derivatives Exchange (NCDEX), July guar gum contracts were trading at ₹10,467, against the previous close of ₹10,431, up by 0.35 per cent.
August jeera futures were trading at ₹28,525 on NCDEX, against the previous close of ₹28,620, down by 0.33 per cent.