Crude oil futures traded lower on Friday morning as Hurricane Rafael forced operators to stop oil and gas production in the US Gulf of Mexico.
At 9.56 am on Friday, January Brent oil futures were at $75.16, down by 0.62 per cent, and December crude oil futures on WTI (West Texas Intermediate) were at $71.82, down by 0.75 per cent.
November crude oil futures were trading at ₹6064 on the Multi Commodity Exchange (MCX) during the initial hour of trading on Friday against the previous close of ₹6129, down by 1.06 per cent, and December futures were trading at ₹6052 against the previous close of ₹6106, down by 0.88 per cent.
The US Bureau of Safety and Environmental Enforcement (BSEE) said on Thursday that approximately 22.36 per cent of the current daily oil production and 9.73 per cent of the current daily natural gas production in the Gulf of Mexico has been shut-in response to Hurricane Rafael.
BSEE said that energy producers had shut in 391,214 barrels a day of oil production and nearly 181 million cubic feet of natural gas in the region.
Meanwhile, crude oil prices got support after the US Federal Reserve announced the reduction in interest rate by 25 basis points. This follows a reduction of 50 basis points in September. Market was also expecting 25 basis points reduction in its November meeting.
The move to reduce interest rates is aimed at sustaining the economic growth in the that country. The US is a major consumer of crude oil in the global market.
Market is now keenly awaiting the outcome of the meeting of the National People’s Congress of China. The meeting is likely to initiate some stimulus measures to boost economic growth in China. The meeting, which began earlier this week, is scheduled to conclude on Friday. China is one of the major consumers of crude oil, and any move to boost economic growth in that country will create demand for the commodity in the global market.
November natural gas futures were trading at ₹227.90 on MCX during the initial hour of trading on Friday against the previous close of ₹226.70, up by 0.53 per cent.
On the National Commodities and Derivatives Exchange (NCDEX), November jeera contracts were trading at ₹25470 in the initial hour of trading on Friday against the previous close of ₹25320, up by 0.59 per cent.
November dhaniya futures were trading at ₹7132 on NCDEX in the initial hour of trading on Friday against the previous close of ₹7148, down by 0.22 per cent.
