Crude oil futures traded higher on Tuesday morning as the market expected increased demand for oil during the summer holiday season in the US.
At 9.52 am on Tuesday, September Brent oil futures were at $86.84, up by 0.28 per cent, and August crude oil futures on WTI (West Texas Intermediate) were at $83.56, up by 0.22 per cent.
July crude oil futures were trading at ₹6,977 on the Multi Commodity Exchange (MCX) during initial trading on Tuesday morning against the previous close of ₹6,950, up by 0.39 per cent, and August futures were trading at ₹6,909, against the previous close of ₹6,881, up by 0.41 per cent.
Car travel to vroom
Citing data from the American Automobile Association, market reports said US holiday travel is expected to grow by 5.2 per cent this season.
The reports noted that car travel alone is expected to grow by 4.8 per cent in the US during this travel season. Car travel is expected to gain momentum with the US Independence Day holiday this week. The US is a major consumer of crude oil in the world market.
With the slight easing in US inflation, the market is now expecting the US Federal Reserve to cut interest rates by September. Any reduction in the interest rate will help boost economic growth in that country, thus creating demand for commodities such as crude oil.
The market is now waiting for the release of the minutes of the meeting of the US Federal Reserve on Wednesday. Apart from this, the US non-farm payroll data is expected to be released on Friday. These data releases could further boost market expectations for a rate cut in the US.
The market was earlier expecting Hurricane Beryl would impact oil refining and offshore production in the US. Forecasts now indicate the hurricane could impact the Bay of Campeche in Mexico. This may impact oil production there.
Castorseed up, jeera down
July natural gas futures were trading at ₹206.20 on MCX during the initial hour of trading on Tuesday morning, against the previous close of ₹209.50, down by 1.58 per cent.
On the National Commodities and Derivatives Exchange (NCDEX), July castorseed contracts were trading at ₹5,798 in the initial hour of trading on Tuesday morning, against the previous close of ₹5,779, up by 0.33 per cent.
July jeera futures were trading at ₹28,300 on NCDEX in the initial hour of trading on Tuesday morning, against the previous close of ₹28,800, down by 1.74 per cent.