Crude oil futures traded lower on Monday morning following reports of likely resumption of oil exports from Kurdistan.
At 9.59 am on Monday, May Brent oil futures were at $73.88, down by 0.23 per cent, and April crude oil futures on WTI (West Texas Intermediate) were at $70.18, down by 0.31 per cent.
March crude oil futures were trading at ₹6099 on Multi Commodity Exchange (MCX) during the initial hour of trading on Monday against the previous close of ₹6148, down by 0.80 per cent, and April futures were trading at ₹6111 against the previous close of ₹6163, down by 0.84 per cent.
Quoting an official from Iraq’s Oil Ministry, a Reuters report said that Iraq will export 185,000 barrels a day from Kurdistan through the Iraq-Turkey pipeline once oil shipments resume. All procedures had been completed to allow the resumption of exports through the Iraq-Turkey pipeline, it said.
Market players are now keenly watching the impact of the recent moves by the US administration to initiate a talk with Russia to end the war between Russia and Ukraine. The Russia-Ukraine war entered the fourth year on Monday.
The decision of the US President, Donald Trump, to invite Russia for a peace deal discussion had irked Ukraine. Officials from Russia and the US are expected to meet again this week. A peace deal, if achieved, would help lift US sanctions on Russia. This will help improve crude oil supply from the region.
Meanwhile, reports said that leaders from European Union will meet in March to discuss providing additional support to Ukraine.
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In their Commodities Feed for Monday, Warren Patterson, Head of Commodities Strategy of ING Think, and Ewa Manthey, Commodities Strategist, said oil prices sold off heavily on Friday, with ICE Brent settling 2.68 per cent lower on the day and WTI briefly trading below $70 a barrel on Monday morning for the first time this year.
Recent weakness in prices comes amid intensifying noise about where OPEC+ will take supply levels. The group is currently cutting supply by 2.2 million barrels a day. It is scheduled to bring this supply back onto the market gradually from April. However, there are suggestions that OPEC+ is considering a delay.
They said that any delay would lead to a change in the oil balance, leaving the market relatively tighter than expected. Any delay would also likely not go down well with Trump, who is calling on OPEC+ to increase supply.
“Trade and tariff concerns, along with a push for a peace deal between Russia and Ukraine, will weigh somewhat on the market,” they said.
March natural gas futures were trading at ₹346.40 on MCX during the initial hour of trading on Monday against the previous close of ₹362.90, down by 4.55 per cent.
On the National Commodities and Derivatives Exchange (NCDEX), March jeera contracts were trading at ₹20930 in the initial hour of trading on Monday against the previous close of ₹20990, down by 0.29 per cent.
April turmeric (farmer polished) futures were trading at ₹13000 on NCDEX in the initial hour of trading on Monday against the previous close of ₹13120, down by 0.91 per cent.