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Oil futures edge up on geopolitical tensions

by xyonent
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Oil futures were slightly higher on Wednesday morning, following rising tensions between Russia and Ukraine and in the West Asia region.

As of 9:52 a.m. Wednesday, August Brent crude futures were up 0.01% to $85.34, while August WTI crude futures were up 0.02% to $80.73.

July crude oil futures were trading at Rs 6,734, up 0.48 percent against the previous closing price of Rs 6,702, while August crude oil futures were trading at Rs 6,710, up 0.64 percent against the previous closing price of Rs 6,667, on the Multi Commodity Exchange (MCX) in the first hour of trading on Wednesday morning.

A large fire was reported in a fuel tank at an oil terminal in the southern Russian port city of Azov on Tuesday. Reuters reported that Russian officials and Ukrainian intelligence sources said the blaze was caused by a Ukrainian drone strike.

The port of Azov has two oil product terminals and handled approximately 220,000 tons of fuel for export from January to May.

In separate developments on Tuesday, Israeli Foreign Minister Israel Katz warned that a decision on all-out war with Lebanon’s Hezbollah was coming soon. Meanwhile, the United States sent special envoy Amos Hofstein to Lebanon to try to ease tensions, following an increase in cross-border attacks along Lebanon’s southern border. Media reports suggest Hezbollah may attack the Israeli city of Haifa.

These developments in major crude oil producing regions have raised concerns in the market about possible supply disruptions.

The country’s crude oil inventories increased, according to weekly oil situation data released by the American Petroleum Institute (API), an industry group. Crude oil inventories rose by 2.26 million barrels in the week ended June 14, API said.

However, official data from the US Energy Information Administration (EIA) is due to be released later in the day, which will provide a clearer picture of US crude oil inventory levels.

June natural gas futures were trading at Rs 244 on MCX in the first hour of trading on Wednesday morning, up 0.83 per cent against the previous day’s closing price of Rs 242.

On the National Commodity and Derivatives Exchange (NCDEX), July cottonseed meal contract was trading at Rs 2,744 in the first hour of morning trading on Wednesday, up 0.22 per cent from the previous day’s closing price of Rs 2,738.

July guar gum futures were trading at Rs 10,780 on the NCDEX in the first hour of trading on Wednesday morning, down 0.33 per cent from the previous day’s closing price of Rs 10,816.

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