Crude oil dips as industry report indicates inventory build-up in US

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Crude oil futures traded lower on Thursday morning as an industry report indicated an increase in crude oil inventories in the US.

At 9.52 am on Thursday, December Brent oil futures were at $85.58, down by 0.28 per cent, and November crude oil futures on WTI (West Texas Intermediate) were at $83.12, down by 0.44 per cent.

October crude oil futures were trading at ₹6,924 on the Multi Commodity Exchange (MCX) during initial trading, against the previous close of ₹7,017, down by 1.33 per cent, and November futures were trading at ₹6,832, against the previous close of ₹6,912, down by 1.16 per cent.

Higher than expectations

According to the American Petroleum Institute (API), crude oil inventories in the US increased to 12.94 million barrels for the week ending October 6. This build was higher than market expectations.

In its Commodities Feed on Thursday, ING Think, the economic and financial analysis wing of Dutch multinational financial services firm ING, said: “Unlikely to help sentiment this morning are API inventory numbers, which show that US crude oil inventories increased by 12.94 million barrels over the week. Lower refinery run rates due to maintenance, likely contributed to this increase in crude oil inventories in the US.”

Meanwhile, gasoline inventories are reported to have increased by 3.65 million barrels, while distillate stocks fell by 3.54 million barrels. Falling distillate stocks from already low levels will be a concern for the market, it said.

However, official data from the US EIA (Energy Information Administration) is expected later in the day.

ING Think also noted that the risk premium continues to erode, with the conflict largely contained to Israel and Hamas. Reports that the Iranian government was surprised by the Hamas attack may also ease concerns that the US will enforce sanctions against Iran more aggressively, although there have been conflicting reports in recent days regarding Iran’s involvement, it said.

Jeera gains, dhaniya dips

October natural gas futures were trading at ₹281 on MCX, against the previous close of ₹277.80, up by 1.19 per cent.

On NCDEX, dhaniya (coriander) November futures dropped by 0.58 per cent to ₹6,874 a quintal. Jeera (cumin) November contracts gained 0.75 per cent at ₹54,345 a quintal.



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