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Crude oil traded lower on Friday morning as the market fears that uncertainties over the US debt ceiling will have an impact on the global economy.
At 9.55 am on Friday, July Brent oil futures were at $74.53, down by 0.60 per cent, and June crude oil futures on WTI were at $70.49, down by 0.54 per cent.
May crude oil futures were trading at ₹5804 on Multi Commodity Exchange (MCX) during initial trading against the previous close of ₹5843, down by 0.67 per cent, and June futures were trading at ₹5834 against the previous close of ₹5876, down by 0.71 per cent.
Another bank in trouble?
On Thursday, the US Treasury Secretary, Janet Yellen, asked the US Congress to increase the $31.4 trillion federal debt limit to avoid a default. She felt that a default would lead to a global economic downturn and risk undermining the global economic leadership of the US.
Quoting Yellen, a Reuters report said: “A default would threaten the gains that we have worked so hard to make over the past few years in our pandemic recovery. It would spark a global downturn that would set us back much further. It would also risk undermining US global economic leadership and raise questions about our ability to defend our national security interests.”
Added to this, the regional banking crisis in the US also impacted the sentiments in the market. On Thursday, the Los Angeles-based PacWest Bancorp announced a decline in its deposits.
However, the bank said more collateral has been posted to the US Federal Reserve to improve its liquidity.
Meanwhile, a report by OPEC (Organization of the Petroleum Exporting Countries) limited further decline in the prices of crude oil in the market.
Dhaniya declines
OPEC Monthly Oil Market Report, which was released on Thursday, maintained the forecast for world oil demand growth for 2023 at 2.3 million barrels a day. It said that minor upward adjustments were made due to the better-than-expected performance in China’s economy.
According to the report, the total world oil demand is anticipated to reach 101.9 million barrels a day in 2023. However, it said, the forecast is subject to many uncertainties, including global economic developments and ongoing geopolitical tensions.
May natural gas futures were trading at ₹178.80 on MCX in the initial trading hour of Friday morning against the previous close of ₹179.60, down by 0.45 per cent.
On the National Commodities and Derivatives Exchange (NCDEX), May steel long contracts were trading at ₹45,840 in the initial trading hour of Friday morning against the previous close of ₹45,570, up by 0.59 per cent.
May dhaniya futures were trading at ₹6,740 on NCDEX in the initial trading hour of Friday morning against the previous close of ₹6,780, down by 0.59 per cent.
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