Crude oil futures traded higher on Monday morning due to fears of escalating tensions in West Asia. Hopes of an interest rate cut in the US in September also boosted the price of the commodity.
At 9.54 am on Monday, November Brent oil futures were at $78.64, up by 0.63 per cent, and October crude oil futures on WTI (West Texas Intermediate) were at $75.36, up by 0.71 per cent.
September crude oil futures were trading at ₹6,330 on the Multi Commodity Exchange (MCX) during the initial hour of trading on Monday, against the previous close of ₹6,293, up by 0.59 per cent, and October futures were trading at ₹6,273 against the previous close of ₹6,248, up by 0.40 per cent.,
On Sunday, Hezbollah launched rocket and drone attacks on Israel in retaliation of the assassination of its senior commander in Beirut in July. To prevent further attacks by Hezbollah, Israel attacked Lebanon with several jets.
Addressing the Jackson Hole Economic Symposium on Friday, the US Federal Reserve Chair, Jerome Powell, said the time has come for policy to adjust. “The direction of travel is clear, and the timing and pace of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks,” he said. Following this address, market is now expecting an interest rate cut of 50 basis points in the US in September.
In their Commodities Feed, ING Think’s Warren Patterson, Head of Commodities Strategy, and Ewa Manthey, Commodities Strategist, said oil settled marginally lower last week, despite a strong end to the week. ICE Brent settled more than 2.3 per cent higher on Friday, following Fed Chair Powell’s speech at Jackson Hole, where he said that the ‘time has come’ to cut interest rates. “The focus now for the market is whether the Fed will cut by 25 basis points or 50 basis points at its September meeting. The upcoming jobs report will likely influence the size of the cut,” they said.
The strength in the market on Friday has carried through to early morning trading on Monday, ING Think’s Commodities Feed said.
September aluminium futures were trading at ₹234.85 on MCX during the initial hour of trading on Monday against the previous close of ₹232.25, up by 1.12 per cent.
On the National Commodities and Derivatives Exchange (NCDEX), October jeera contracts were trading at ₹24,960 in the initial hour of trading on Monday, against the previous close of ₹24,480, up by 1.96 per cent.
September guarseed futures were trading at ₹5,152 on NCDEX in the initial hour of trading on Monday, against the previous close of ₹5,196, down by 0.85 per cent.