Crude oil futures traded higher on Wednesday morning as the market awaited the latest policy decision from the US Federal Reserve later today.
At 10.01 am on Wednesday, January Brent oil futures were at $85.19, up by 0.20 per cent, and December crude oil futures on WTI (West Texas Intermediate) were at $81.08, up by 0.07 per cent.
November crude oil futures were trading at ₹6,767 on Multi Commodity Exchange (MCX) during initial trading against the previous close of ₹6,782, down by 0.22 per cent, and December futures were trading at ₹6,752 as against the previous close of ₹6,764, down by 0.18 per cent.
Factor affecting demand
Though the market is expecting the Fed Reserve to keep the interest rates unchanged at the end of its meeting later in the day, it is also expecting it to remain high for a longer duration due to various factors related to the economy in the US. Higher rates in the US are likely to impact the economic growth of that country. This in turn may impact the demand for commodities such as crude oil. US is a major consumer of crude oil in the global market.
- Also read: Fed interest rate decision, macroeco data, Q2 earnings to dictate mkt trends this week: Analysts
Meanwhile, an industry report showed an increase in crude oil inventories in the US. According to the American Petroleum Institute (API), crude oil inventories in that country went up by 1.34 million barrels for the week ending October 27. It was below the market expectations of an increase of 1.60 million barrels.
China, one of the major consumers of crude oil in the global market, reported a disappointing manufacturing activity in October. According to the China Logistics Information Centre, the China Manufacturing Purchasing Managers Index was at 49.5 in October against 50.2 in September.
Jeera heads south, turmeric north
November natural gas futures were trading at ₹299.70 on MCX in the initial trading hour of Wednesday morning against the previous close of ₹301.20, down by 0.50 per cent.
- Also read: Fed maintains key interest rate amid inflation moderation, signals one rate hike in current year
On the National Commodities and Derivatives Exchange (NCDEX), November jeera contracts were trading at ₹43,300 against the previous close of ₹43,710, down by 0.94 per cent.
December turmeric (farmer polished) futures were trading at ₹13,526 on NCDEX against the previous close of ₹13,424, up by 0.76 per cent.