Crude oil futures climbed on Wednesday morning following a report indicating a significant drop in US crude oil inventories.
As of 9:55 a.m. Eastern Time, October Brent crude futures traded at $81.17, marking a 0.59% increase. September West Texas Intermediate (WTI) crude futures were at $78.86, up by 0.656%.
In the domestic market, August crude oil futures on the Multi Commodity Exchange (MCX) were priced at ₹6624, up 0.42% from the previous close of ₹6596. September futures traded at ₹6503, a 0.45% increase from the prior close of ₹6474.
The American Petroleum Institute (API) reported a decrease of 5.20 million barrels in US crude oil inventories for the week ending August 9, surpassing market expectations of a 2 million barrel decline. This inventory drop has fueled optimism about increased demand for crude oil, as the US remains the world’s largest consumer of the commodity. Official data from the US Energy Information Administration (EIA), which will provide a comprehensive view of inventory levels, is still pending.
The International Energy Agency’s (IEA) August Oil Market Report maintained its forecast for global oil demand growth at just under 1 million barrels per day for both 2024 and 2025. Despite a contraction in Chinese oil demand for three consecutive months due to reduced industrial activity, including in the petrochemical sector, advanced economies have shown stronger demand. The US, which consumes one-third of the world’s gasoline, has seen resilient demand driven by a robust service sector and increased miles driven. Consequently, oil consumption in OECD countries shifted from a 300,000 barrel-per-day contraction in Q1 2024 to a 190,000 barrel-per-day growth in Q2.
The recent producer price index (PPI) data from the US, released on Tuesday, was softer than expected, leading market participants to speculate that the Federal Reserve might have more flexibility to cut interest rates in September. Investors are now awaiting the release of US consumer price index (CPI) data later on Wednesday for further insights.
In other commodities, August natural gas futures on MCX traded at ₹182, up 0.55% from the previous close of ₹181. On the National Commodities and Derivatives Exchange (NCDEX), August dhaniya contracts were trading at ₹6678, a decline of 1.10% from ₹6752. August cottonseed oilcake futures were at ₹2870, down 1.14% from ₹2903.
