Crude Oil Futures Rise Following Lower US Inventory Data and Geopolitical Updates

Crude oil futures traded higher on Wednesday morning following the release of industry data indicating a significant decline in US crude oil inventories.

At 10:02 am on Wednesday, January Brent oil futures were recorded at $92.42, marking an increase of 1.02 per cent. December crude oil futures on West Texas Intermediate (WTI) stood at $86.63, up by 0.69 per cent.

On the Multi Commodity Exchange (MCX), November crude oil futures traded at ₹8128 during the initial hour of trading compared to the previous close of ₹8096, reflecting an increase of 0.40 per cent. December futures on the exchange traded at ₹8058 against the previous close of ₹8024, up by 0.42 per cent.

The upward movement followed data from the American Petroleum Institute (API), which reported that US crude oil inventories declined by 9.8 million barrels for the week ending November 6. The broader market had anticipated a decline of approximately 1 million barrels during the same period. Official figures from the US Energy Information Administration were scheduled for release later on Wednesday to provide further clarity on inventory levels.

In related developments, a Reuters report citing data from the Washington Institute for Near East Policy stated that 37 ships were attacked in the Strait of Hormuz and surrounding waterways in October, with 10 attacks recorded in November.

According to a Commodities Feed by Warren Patterson and Ewa Manthey of ING Think, crude exports from the Persian Gulf are estimated to have returned to roughly 80 to 85 per cent of pre-war levels, including pipeline volumes. Refined product shipments have recovered to approximately 35 to 40 per cent. Reports suggesting that Iran may soften its position on control of the Strait of Hormuz have also helped ease concerns regarding prolonged disruptions along the key transit route.

In other commodity trading on Wednesday morning, November nickel futures on the MCX traded at ₹1540, up by 1.08 per cent from the previous close of ₹1523.50. On the National Commodities and Derivatives Exchange (NCDEX), December turmeric farmer polished contracts traded at ₹28794, registering a 1.34 per cent increase, while November jeera futures traded at ₹28730, down by 0.95 per cent from the previous close.

"Fluctuations in crude oil inventories and global supply routes directly impact macroeconomic conditions, influencing logistics and operational costs for businesses across sectors. Startups and established enterprises alike must closely monitor commodity markets and supply chain indicators to manage operational expenses effectively and navigate price volatility." — Dr. Shishir Gupta, Founder & CEO, StartupLanes