Crude oil up as industry data shows decline in US inventories 

Crude oil futures traded higher on Wednesday morning as the industry data showed increase in inventory level in the US.

At 9.52 am on Wednesday, September Brent oil futures were at $81.14, up by 0.16 per cent, and September crude oil futures on WTI (West Texas Intermediate) were at $77.11, up by 0.19 per cent.

August crude oil futures were trading at ₹6468 on Multi Commodity Exchange (MCX) during the initial hour of trading on Wednesday against the previous close of ₹6458, up by 0.15 per cent, and September futures were trading at ₹6406 against the previous close of ₹6402, up by 0.06 per cent.

• Also read: Crude oil up as China lowers lending rate

According to the trade body American Petroleum Institute (API), crude oil inventories in the US declined by 3.9 million barrels for the week ending July 19. Market was expecting it to decline by 2.5 million barrels during the period.

In their Commodities Feed, ING Think’s Warren Patterson, Head of Commodities Strategy, and Ewa Manthey, Commodities Strategist, said price action in early morning trading on Wednesday has been more constructive.

This is after API data overnight showed that US crude oil inventories fell by 3.9 million barrels over the last week, more than the draw the market was expecting. In addition, declines were also seen on the product side. Gasoline and distillate inventories in the US fell by 2.77 million barrels and 1.5 million barrels, respectively, they said.

Short-term supply disruptions also provided support to the crude oil prices on Wednesday. ING Think’s Commodities Feed said wildfires in Canada have already forced some producers to curtail production, and these fires threaten a large amount of supply.

Quoting a Bloomberg report, Commodities Feed said 388,000 barrels a day of oil production is within 10 km of fires that are at least 10 hectares in size.

August natural gas futures were trading at ₹183.50 on MCX during the initial hour of trading on Wednesday against the previous close of ₹187.80, down by 2.29 per cent.

On the National Commodities and Derivatives Exchange (NCDEX), August turmeric (farmer polished) contracts were trading at ₹16000 in the initial hour of trading on Wednesday against the previous close of ₹15938, up by 0.39 per cent.

August guarseed futures were trading at ₹5422 on NCDEX in the initial hour of trading on Wednesday against the previous close of ₹5451, down by 0.53 per cent.

• Also read: India should avoid high dependence on imports for solar panels, critical minerals: Economic Survey