Crude oil futures traded lower on Tuesday morning despite concerns over supply disruptions from Libya.
At 9.54 am on Tuesday, November Brent oil futures were at $77.27, down by 0.32 per cent, and October crude oil futures on WTI (West Texas Intermediate) were at $73.92, down by 0.16 per cent.
September crude oil futures were trading at ₹6,221 on the Multi Commodity Exchange (MCX) during the initial hour of trading on Tuesday, against the previous close of ₹6,222, down by 0.02 per cent, and October futures were trading at ₹6,155, against the previous close of ₹6,157, down by 0.03 per cent.
In a major development, the National Oil Corporation of Libya declared force majeure on El-Feel oil field from September 2. Operated by Mellitah Oil and Gas, this field has a capacity of 70,000 barrels a day.
A Reuters report said the UN Support Mission in Libya held talks on Monday to resolve a dispute over control of the central bank. This dispute triggered a blockade of crude oil production, following which Libya’s oil production went down below half of its usual level.
Total production decreased to around 591,000 barrels a day on August 28, from nearly 959,000 barrels a day on August 26. The report said production was around 1.28 million barrels a day on July 20. It said the rival factions had concluded a draft agreement and aimed to sign it on Tuesday.
Expectations of higher supply in the coming months impacted the price of the commodity on Tuesday. According to a Reuters report, some members of OPEC+ (Organisation of the Petroleum Exporting Countries and its allies) are likely to begin increasing output from October.
Added to this, the recent manufacturing PMI numbers from China showed a decline in manufacturing activity in that country during August, when compared to July. Figures from the National Bureau of Statistics of China showed that manufacturing PMI of that country fell to 49.1 in August, from 49.4 in July. The market forecast it to be around 49.5.
China is a major consumer of crude oil in the global market and such developments are likely to impact demand for crude oil also.
September natural gas futures were trading at ₹183.20 on MCX during the initial hour of trading on Tuesday, against the previous close of ₹184.60, down by 0.76 per cent.
On the National Commodities and Derivatives Exchange (NCDEX), September jeera contracts were trading at ₹26,350 in the initial hour of trading on Tuesday, against the previous close of ₹26,260, up by 0.34 per cent.
October turmeric (farmer polished) futures were trading at ₹13,368 on NCDEX in the initial hour of trading on Tuesday, against the previous close of ₹13,630, down by 1.92 per cent.
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Published on September 3, 2024
https://www.thehindubusinessline.com/markets/commodities/crude-oil-down-despite-libya-supply-disruptions/article68599607.ece
