Crude oil futures traded higher Friday morning after reports that G7 countries had agreed to cap prices on Russian oil exports.
As of 10am on Friday, January Brent crude futures were up 0.78% at $95.41, while December WTI crude futures were up 0.83% at $88.90.
Crude oil futures for November were trading at INR 7,347 on the Multi-Commodity Exchange (MCX) during the first trading hours on Friday morning. This was up 0.08% from the previous close of INR 7,341, while December futures were up 0.05% from the previous close of INR 7,283.
Target Russian revenue
The G7 countries and Australia have agreed to set a fixed price when they finalize a price cap for Russia’s oil later this month, according to a Reuters report, citing sources.
The Price Cap Plan requires participating countries to deny insurance, finance, brokerage, navigation and other services to oil cargoes priced above the price caps for crude oil and petroleum products.
The price cap aims to reduce Russia’s oil revenues after the war with Ukraine. However, market analysts have expressed concerns about the cap’s effectiveness as major Asian countries, important oil consumers in the global market, have shown no signs of agreeing to the proposed price cap.
However, the upward price momentum was limited by rising interest rates in the US and other economies.
As previously reported, the US Federal Reserve decided at its meeting on Wednesday to raise interest rates by 75 basis points from 3.25% to 4% to control inflation in the country. In addition to this, other central banks in various regions of the world have also announced their decisions to raise interest rates in their countries. Market analysts feel that further rate hikes could lead to a slowdown in the global economy, impacting demand for crude oil.
guar gum, zinc gain
Zinc futures for November were trading at Rs 257.40 on MCX in the first trading hours on Friday morning, before closing at Rs 253.55, up 1.52%.
On the National Commodities and Derivatives Exchange (NCDEX), the November guar gum contract was trading at INR 9,413 at the first trading hour on Friday morning.
The November steel long futures was trading at Rs 46,910 on NCDEX in the first trading hours on Friday morning, down 0.68% from its previous close of Rs 47,230.