Crude oil up as Israel launches ground invasion in Lebanon

Crude oil futures traded higher on Tuesday morning as Israel began a ground invasion of Lebanon.

At 9.54 am on Tuesday, December Brent oil futures were at $71.82, up by 0.17 per cent, and November crude oil futures on WTI (West Texas Intermediate) were at $68.30, up by 0.19 per cent.

October crude oil futures were trading at ₹5,740 on Multi Commodity Exchange (MCX) during the initial hour of trading on Tuesday against the previous close of ₹5,742, down by 0.03 per cent, and November futures were trading at ₹5,734 against the previous close of ₹5,732, up by 0.03 per cent.

Quoting a military statement, a Reuters report said that Israel had begun ‘limited, localised, and targeted ground raids based on precise intelligence’ against Hezbollah in southern Lebanon villages close to the border that posed ‘an immediate threat to Israeli communities in northern Israel’. Air force and artillery were supporting the ground forces with ‘precise strikes’, it said.

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Market reports noted that the escalation of tensions between Israel and Hezbollah in West Asia may force Iran to directly take part in the conflict. Iran is a member of the Organization of the Petroleum Exporting Countries (OPEC) group. Market players feel that Iran’s direct participation could impact crude oil supplies from the region.

However, the reported plans by OPEC+ to increase production output in the coming months limited the gains in the price of the commodity. Market reports said that OPEC+ is scheduled to increase the production output by 180,000 barrels a day in December.

Added to this, there were reports that Libya is set to restart oil production after about a month of halt.

Meanwhile, recent data from China showed contraction in manufacturing activity for the fifth consecutive month in September, and a slowdown in the service sector. China is a major market for crude oil, and a slowdown in economy of that country impacts the demand for crude oil in the world market.

October zinc futures were trading at ₹282.65 on MCX during the initial hour of trading on Tuesday against the previous close of ₹280.55, up by 0.75 per cent.

On the National Commodities and Derivatives Exchange (NCDEX), October turmeric (farmer polished) contracts were trading at ₹13,952 in the initial hour of trading on Tuesday against the previous close of ₹14,026, down by 0.53 per cent.

October guargum futures were trading at ₹11700 on NCDEX in the initial hour of trading on Tuesday against the previous close of ₹11660, up by 0.34 per cent.