Crude oil futures traded higher on Monday morning as several members of Organization of Petroleum Exporting Countries and allies, known as OPEC+, announced extension of additional voluntary cuts of 2.2 million barrels a day for the second quarter of 2024.

At 9:52 am on Monday, May Brent oil futures were at $83.69, up by 0.17 per cent, and April crude oil futures on WTI (West Texas Intermediate) were at $79.98, up by 0.01 per cent.

March crude oil futures were trading at ₹6,628 on Multi Commodity Exchange (MCX) during initial trading against the previous close of ₹6,638, down by 0.15 per cent, and April futures were trading at ₹6,590 as against the previous close of ₹6,600, down by 0.15 per cent.

A media statement by OPEC said several OPEC+ countries extended additional voluntary cuts of 2.2 million barrels a day. This move was aimed at supporting the stability and balance of oil markets.

Middle-East tension continues

Following OPEC+ countries announced additional voluntary cuts: Saudi Arabia (1 million barrels a day); Iraq (220,000 barrels a day); United Arab Emirates (163,000 barrels a day); Kuwait (135,000 barrels a day); Kazakhstan (82,000 barrels a day); Algeria (51,000 barrels a day); and Oman (42,000 barrels a day) for the second quarter of 2024. Afterwards, in order to support market stability, these voluntary cuts will be returned gradually subject to market conditions, it said.

OPEC statement said the above will be in addition to the announced voluntary cut by the Russian Federation of 471,000 barrels a day for the second quarter of 2024.

Russia’s voluntary production cut is in addition to the voluntary cut of 500,000 barrels a day previously announced in April 2023, which extends until the end of December 2024. The export cut will be made from the average export levels of the months of May and June of 2023, the statement said.

Meanwhile, there was no sign of decline in tensions in Middle East as the Houthis said on Sunday that more British ships will be targeted in the Gulf of Aden.

In a post on X on Sunday, Hussein al-Ezzi, deputy foreign minister in the Houthi-led government, said: “Yemen will continue to sink more British ships, and any repercussions or other damages will be added to Britain’s bill.”

Tensions in Middle East are impacting the movement of commodities such as crude oil.

Steel, dhaniya surge

March natural gas futures were trading at ₹157.50 on MCX against the previous close of ₹153.10, up by 2.87 per cent.

On the National Commodities and Derivatives Exchange (NCDEX), March steel long contracts were trading at ₹45,150 against the previous close of ₹42,600, up by 5.99 per cent.

April dhaniya futures were trading at ₹8,278 on NCDEX in the initial trading hour of Monday morning against the previous close of ₹8,026, up by 3.14 per cent.

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