Crude Oil Futures Rise Following UAE's Suspension of Economic Ties With Iran

Crude oil futures traded higher on Thursday morning following the UAE's decision to suspend all financial and economic transactions with Iran until further notice. The geopolitical development follows a military escalation, with the UAE Defence Ministry reporting the detection of two ballistic missiles launched from Iran that fell into the sea.

At 10:02 am on Thursday, October Brent oil futures stood at $92.04, marking an increase of 0.46 per cent. WTI (West Texas Intermediate) crude oil futures for October were recorded at $84.64, up by 0.30 per cent.

Domestic figures on the Multi Commodity Exchange (MCX) showed mixed movements during the initial hours of trading on Thursday. September crude oil futures traded at ₹8,112 compared to the previous close of ₹8,151, down by 0.48 per cent. October futures on the MCX traded at ₹7,958 against the previous close of ₹8,006, down by 0.60 per cent.

September natural gas futures on the MCX were recorded at ₹269.80 during the initial hour of trading, down by 1.35 per cent from the previous close of ₹273.50.

In the agricultural commodity segment on the National Commodities and Derivatives Exchange (NCDEX), October turmeric contracts traded at ₹21,400 during the initial hour of trading, representing an increase of 0.66 per cent from the previous close of ₹21,260. August cottonseed oilcake futures traded at ₹4,450 on the NCDEX, up by 0.52 per cent compared to the previous close of ₹4,428.

In international market updates, data from the US Energy Information Administration (EIA) indicated that US commercial crude oil inventories increased by 4.4 million barrels from the previous week.

The weekly petroleum status report further showed that total motor gasoline inventories in the US increased by 0.7 million barrels last week, remaining 5 per cent below the five-year average for this time of year. Conversely, distillate fuel inventories decreased by 1.5 million barrels, remaining about 13 per cent below the five-year average.

Total petroleum products supplied in the US over the last four-week period averaged 20.5 million barrels per day, reflecting a 2.9 per cent decrease from the same period last year. Motor gasoline product supplied averaged 8.9 million barrels per day (down 0.9 per cent), distillate fuel product supplied averaged 3.7 million barrels per day (down 0.8 per cent), and jet fuel product supplied recorded a 6.3 per cent decline over the same four-week comparison period.

"Geopolitical tensions in the Middle East continue to play a critical role in driving short-term volatility in global crude oil markets. At the same time, fluctuating inventory levels in the US highlight the complex supply and demand dynamics that businesses and energy consumers must navigate. For entrepreneurs and supply chain operators, monitoring these commodity price movements is essential for managing operational costs effectively in an unpredictable macroeconomic environment." — Dr. Shishir Gupta, Founder & CEO, StartupLanes