Crude oil futures traded higher on Tuesday morning following concerns over potential supply disruptions due to the escalating Russia-Ukraine conflict.
At 9.58 am on Tuesday, November Brent oil futures were at $68.44, up by 0.43 per cent, and October crude oil futures on WTI (West Texas Intermediate) were at $64.94, up by 0.51 per cent. September crude oil futures were trading at ₹5725 on during the initial hour of trading on Tuesday against the previous close of ₹5703, up by 0.39 per cent, and October futures were trading at ₹5698 against the previous close of ₹5675, up by 0.41 per cent.
Quoting Ukraine’s President Volodymyr Zelensky, a Reuters report said that Ukraine plans new strikes deep into Russia after weeks of intensified attacks on Russian energy assets. Russia has targeted Ukraine’s energy and transport systems in recent weeks, while Ukraine has been attacking Russian oil refineries and pipelines, it said.
Recent media reports also said that some European leaders are calling for secondary sanctions on Russian oil. Market players are concerned that these developments could impact the supply of the commodity to the world market.
In their Commodities Feed for Tuesday, Warren Patterson, Head of Commodities Strategy at ING Think, and Ewa Manthey, Commodities Strategist, said ICE Brent edged higher on Monday, breaking back above $68 a barrel and settling just shy of 1 per cent higher on the day. Yet the upward move came amid thin volumes due to the Labour Day holiday in the US.
Stating that the market’s attention will be increasingly turning to the OPEC+ meeting this weekend, they said: “We believe, just like the broader market, that the group will leave production levels unchanged for October. This follows OPEC+ unwinding its 2.2 million barrels a day of additional voluntary supply cuts over the last six months. The scale of the surplus through next year means it’s unlikely the group will bring additional supply onto the market. The bigger risk is OPEC+ deciding to reinstate supply cuts, given concerns about a surplus.”
Referring to Brazilian media reports, they said the US government is looking to prepare new measures, including trade curbs due to its imports of Russian diesel. Since the EU ban on Russian refined products, Brazil has become a key buyer of Russian diesel. According to LSEG data, Brazilian imports of diesel from Russia have averaged a little over 590,000 tonnes per month so far this year, they said.
September nickel futures were trading at ₹1372 on MCX during the initial hour of trading on Tuesday against the previous close of ₹1355.50, up by 1.22 per cent.
On the , September dhaniya contracts were trading at ₹7654 in the initial hour of trading on Tuesday against the previous close of ₹7682, down by 0.36 per cent.
October turmeric (farmer polished) futures were trading at ₹12426 on NCDEX in the initial hour of trading on Tuesday against the previous close of ₹12506, down by 0.64 per cent.