Crude oil futures traded higher on Monday morning following apprehensions over supply concerns due to escalating tensions in West Asia.
At 9.54 am on Monday, December Brent oil futures were at $71.83, up by 0.41 per cent, and November crude oil futures on WTI (West Texas Intermediate) were at $68.50, up by 0.47 per cent.
October crude oil futures were trading at ₹5,753 on Multi Commodity Exchange (MCX) during the initial hour of trading on Monday against the previous close of ₹5,694, up by 1.04 per cent, and November futures were trading at ₹5,740 against the previous close of ₹5,679, up by 1.07 per cent.
Israel increased attacks on Houthi targets in Yemen and airstrikes in Lebanon on Sunday. This followed after the killing of the Hezbollah leader, Sayyed Hassan Nasrallah, a few days ago.
According to reports, airstrikes on Hodeidah port in Yemen were a reply to missile attacks by Houthi on Israel in a few days ago.
Escalation of tension in West Asia has created apprehensions in the market that the increase in attacks in the region could attract the participation of the US and Iran. US is the main ally of Israel, and Iran backs Houthis.
Iran is a major producer member of the Organization of the Petroleum Exporting Countries (OPEC) group. Following this, market fears that Iran’s participation could lead to disruption in crude oil supplies to the world market.
The US is also gearing up to face the tensions in West Asia. Pentagon spokesperson Major General Patrick Ryder said in a statement that the US is determined to prevent Iran and Iranian-backed partners and proxies from exploiting the situation or expanding the conflict.
He said if Iran or groups backed by it use this moment to target American personnel or interests in the region, the US will take every necessary measure to defend its people. “We will further reinforce our defensive air-support capabilities in the coming days,” he said.
However, crude oil prices remained under pressure following Saudi Arabia’s plans to increase oil production during the current year. Added to this, OPEC+ is planning to increase the crude oil production output by 180,000 barrels a day in December.
October natural gas futures were trading at ₹242 on MCX during the initial hour of trading on Monday against the previous close of ₹24,4.10, down by 0.86 per cent.
On the National Commodities and Derivatives Exchange (NCDEX), October turmeric (farmer polished) contracts were trading at ₹14250 in the initial hour of trading on Monday against the previous close of ₹14,362, down by 0.78 per cent.
October guargum futures were trading at ₹11,450 on NCDEX in the initial hour of trading on Monday against the previous close of ₹11,525, down by 0.65 per cent.