traded higher on Tuesday morning following the shutdown of Saudi Arabia’s East-West pipeline and the postponement of talks between the Gulf states and Iran.
At 10 am on Tuesday, November Brent oil futures were at $107.31, up by 1.54 per cent, and October crude oil futures on WTI (West Texas Intermediate) were at $103.18, up by 1.77 per cent. September crude oil futures were trading at ₹9894 on Multi Commodity Exchange (MCX) during the initial hour of trading on Tuesday against the previous close of ₹9717, up by 1.82 per cent, and October futures were trading at ₹9464 against the previous close of ₹9316, up by 1.59 per cent.
In their Commodities Feed for Tuesday, Warren Patterson, Head of Commodities Strategy of ING Think, and Ewa Manthey, Commodities Strategist, said oil prices surged on Monday amid broader escalation in West Asia and the shutdown of Saudi Arabia’s 7 million barrels a day East-West pipeline. ICE Brent traded to an intraday high of just below $110 a barrel, a level at which the market has faced tough resistance over the last three days.
They said that plenty of uncertainty remains over the extent of damage and the duration of the outage for the East-West pipeline in Saudi Arabia. Prices are likely to remain well supported until we get clarity. Reports suggest the pipeline could be offline for several weeks. The Saudis have oil in storage tanks at Yanbu, which should sustain exports for several days. The risk is that port stocks run out before the pipeline resumes. Some suggest the Saudis are looking to increase exports via the Strait of Hormuz amid the pipeline outage. Given the disruptions in the Strait of Hormuz, that may be easier said than done, they said.
Market reports said that Oman postponed a meeting between Iran and Gulf states to reopen the Strait of Hormuz. The meeting was scheduled to be held Monday. Oman did not give the future date of the meeting.
In a post on Truth Social, US President Donald Trump said: “The failing Nation of Iran wants to make a deal, quickly and badly. I will determine whether or not the U.S.A. will choose to engage – The concept of which we are open to.”
In another post, he said: “Ukraine has agreed not to hit Russian Energy targets. Russia has agreed to do, likewise! The World’s Diesel price rise is mostly caused by the Russia/Ukraine War, not Iran.”
September natural gas futures were trading at ₹277.20 on MCX during the initial hour of trading on Tuesday against the previous close of ₹278.40, down by 0.43 per cent.
On the National Commodities and Derivatives Exchange (NCDEX), September cottonseed oilcake contracts were trading at ₹2615 in the initial hour of trading on Tuesday against the previous close of ₹2557, up by 2.27 per cent.
September castorseed futures were trading at ₹7500 on NCDEX in the initial hour of trading on Tuesday against the previous close of ₹7618, down by 1.55 per cent.