Saudi Arabia’s decision to raise the official selling price of crude oil for Asia helped the oil futures trade higher
At a time when the global crude oil market is facing tight supplies, the revival of demand from China following the relaxation of Covid restrictions helped oil futures to trade higher on Tuesday morning.
At 10.04 am on Tuesday, the August Brent oil futures were at $120.22, up by 0.41 per cent; and July crude oil futures on WTI were at $119.34, up by 0.71 per cent.
June crude oil futures were trading at ₹9271 on Multi Commodity Exchange (MCX) in the early trade against the previous close of ₹9,225, up by 0.50 per cent; and July futures were trading at ₹9,104 as against the previous close of ₹9,067, up by 0.41 per cent.
Beijing and Shanghai regions of China that faced strict Covid-related lockdowns for almost two months are gradually opening up now. Beijing opened the restaurants for dine-in service from Monday. Traffic restrictions were in place during the lockdown period have been eased now in many parts of China.
China is a major consumer of crude oil in the global market, and relaxation in Covid restrictions would help boost the demand for the commodity further.
Saudi Arabia’s decision to raise the official selling price of Arab light crude for Asia also helped the crude oil futures to trade higher. Saudi Arabia increased the official selling price for July-loading Arab Light to Asia by $2.1 a barrel from June. The market was expecting an increase of around $1-1.5 a barrel. However, Saudi did not change the price for the crude oil to the US.
Though OPEC (Organization of the Petroleum Exporting Countries) and its allies have decided to increase the crude production output by 648,000 barrels a day in July and August, many market participants are not optimistic about it as some member countries of OPEC+ are not in a position to increase the production output due to various reasons.
June menthaoil futures were trading at ₹1022.10 on MCX in the initial hour of Tuesday morning against the previous close of ₹1033.50, down by 1.10 per cent.
On the National Commodities and Derivatives Exchange (NCDEX), June turmeric (farmer polished) futures were trading at ₹8080 in the initial hour of Tuesday morning against the previous close of ₹7996, up by 1.05 per cent.
June steel long contracts were trading at ₹46400 on NCDEX in the initial hour of Tuesday morning against the previous close of ₹47200, down by 1.69 per cent.