Crude oil futures traded lower on Tuesday morning following apprehensions about an oversupply, as reports said that Iraq may soon resume oil exports via Kurdistan.

At 9.55 am on Tuesday, November Brent oil futures were at $66.23, down by 0.51 per cent, and November crude oil futures on WTI (West Texas Intermediate) were at $61.99, down by 0.47 per cent. October crude oil futures were trading at ?5,504 on Multi Commodity Exchange (MCX) during the initial hour of trading on Tuesday against the previous close of ?5,522, down by 0.33 per cent, and November futures were trading at ?5,486 against the previous close of ?5,506, down by 0.36 per cent.

A Reuters report said that Iraq’s federal and Kurdish regional governments have reached a deal with oil firms to resume crude exports via Türkiye. This will allow exports to resume of about 2,30,000 barrels per day from Iraqi Kurdistan. Export from this region was suspended in March 2023.

Quoting an unnamed official source, the report said: “We will on Tuesday start technical procedures to prepare pipeline operations, with oil flows expected to restart within 48 hours.”

Iraq’s oil marketer SOMO said that Iraq has increased oil exports under an OPEC+ (Organization of the Petroleum Exporting Countries’ and allies) agreement. SOMO expects Iraq’s oil exports to range from 3.4 million to 3.45 million barrels per day in September. Iraq is one of the major producers of crude oil among OPEC+ members.

Markets also assessed the geopolitical risks arising out of tensions in Russia and West Asia. On Monday, NATO allies accused Russia of violating airspace in Estonia and Poland. Britain warned that this could trigger an armed conflict in the region.

On Monday, Russia’s defence ministry said that its forces had taken control of the settlement of Kalynivske in Dnipropetrovsk region of Ukraine.

Tensions in West Asia prompted many world leaders to formally recognise a Palestinian state. News reports said that two hospitals in Gaza have been taken out of service due to the escalation of ground offensive by Israel.

October natural gas futures were trading at ?274.40 on MCX during the initial hour of trading on Tuesday against the previous close of ?276.40, down by 0.72 per cent.

On the National Commodities and Derivatives Exchange (NCDEX), October dhaniya contracts were trading at ?8,382 in the initial hour of trading on Tuesday against the previous close of ?8,354, up by 0.34 per cent.

December cottonseed oilcake futures were trading at ?2,908 on NCDEX in the initial hour of trading on Tuesday against the previous close of ?2,913, down by 0.17 per cent. 

Source: The Hindu Business Line 

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