Crude oil futures traded higher on Monday morning as markets heaved a sigh of relief after the US avoided a potential government shutdown over the weekend.
At 9.57 am on Monday, March Brent oil futures were at $72.93, up by 0.51 per cent, and February crude oil futures on WTI (West Texas Intermediate) were at $69.86, up by 0.58 per cent.
January crude oil futures were trading at ₹5,961 on Multi Commodity Exchange (MCX) during the initial hour of trading on Monday against the previous close of ₹5,938, up by 0.39 per cent, and February futures were trading at ₹5,954 against the previous close of ₹5,924, up by 0.51 per cent.
Fears of a shutdown rose in the US after the President-elect Donald Trump criticised a funding bill. He also proposed a revised bill that sought to increase the debt limit. The revised bill was rejected by the lawmakers.
However, the market players were relieved after the US Congress passed a spending legislation late on Saturday night avoiding the possibilities of a week-end shutdown in the US. The US President, Joe Biden, approved the spending bill providing government funding until March.
A US shutdown would have impacted the travel during the holiday season in the US. This, in turn, would have impacted the demand for commodities such as crude oil.
Meanwhile, the latest PCE price index data in the US also supported the prices of crude oil. This preferred inflation gauge of the US Federal Reserve read lower than expected for November. This raised hopes of further rate cuts in 2025. A reduction in interest rates would help boost demand for commodities such as crude oil.
The fears of a potential trade war between the US and European Union (EU) surfaced after the US President-elect, Donald Trump, warned of tariffs on the EU, if it did not conduct large-scale purchases of oil and gas from the US.
January natural gas futures were trading at ₹298.50 on MCX during the initial hour of trading on Monday against the previous close of ₹291.10, up by 2.54 per cent.
On the National Commodities and Derivatives Exchange (NCDEX), January jeera contracts were trading at ₹24,100 in the initial hour of trading on Monday against the previous close of ₹23,970, up by 0.54 per cent.
January guarseed futures were trading at ₹5,283 on NCDEX in the initial hour of trading on Monday against the previous close of ₹5,272, up by 0.21 per cent.
