Crude oil futures trade higher in anticipation of OPEC+ cue

With the market expecting key signals from the meeting of the OPEC (Organization of the Petroleum Exporting Countries) and its allies, known as OPEC+, later on Monday, crude oil futures traded higher in the morning session.

At 10.02 am on Monday, November Brent oil futures were at $95.15, up by 2.29 per cent; and October crude oil futures on WTI were at $88.75, up by 2.16 per cent.

September crude oil futures were trading at ₹7106 on Multi Commodity Exchange (MCX) in the initial trading hour of Monday morning against the previous close of ₹6967, up by 2 per cent; and October futures were trading at ₹7097 as against the previous close of ₹6964, up by 1.91 per cent.

Though the market is not expecting the OPEC+ meeting to announce a significant increase in the crude oil production, the recent warnings by Saudi Arabia, a major oil producer, on cutting down the production output to control the price fall in the global markets has put the market on the edge. This move was supported by some other members from OPEC+ bloc.

Citing sources, Wall Street Journal on Sunday reported Russia does not support the move proposed by some members for an oil production cut at this time. Being a major oil producer, Russia is an important member of the OPEC+ bloc.

Market players feel that OPEC+ may keep the production targets unchanged after taking into consideration the above developments.

The meeting of OPEC+, which is scheduled later in the day, is expected to take a call on crude oil production targets for its members for October.

In his outlook for the day, Prathamesh Mallya, AVP (Research, Non-Agri Commodities, and Currencies), Angel One Ltd, said: “We expect crude to trade higher towards ₹7100 levels, break of which could prompt the price to move higher to ₹7210 levels.”

Natural gas

September natural gas futures were trading at ₹717.10 on MCX in the initial trading hour of Monday morning against the previous close of ₹706.20, up by 1.54 per cent.

It may be mentioned here that the Russian energy company, Gazprom PJSC on Friday said it cannot resume natural gas flows through a key pipeline to Germany for now. This has led to an energy crisis in the region.

NCDEX

On the National Commodities and Derivatives Exchange (NCDEX), September cottonseed oilcake contracts were trading at ₹2683 in the initial trading hour of Monday morning against the previous close of ₹2751, down by 2.47 per cent.

September jeera futures were trading at ₹24900 on NCDEX in the initial trading hour of Monday morning against the previous close of ₹25225, down by 1.29 per cent.

Published on

September 05, 2022

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