Crude oil prices rise on spot demand
Crude oil increased to around $69 a barrel after Monday’s 7% drop.
Market participants widened their positions on a firm spot demand.
Analysts stated the raising of bets by participants held crude oil prices higher in the futures trade.
OPEC and its allies agree to extend oil production
After a few weeks in which the oil price has reached highs not seen in three years and tensions within OPEC and its allies, the long-awaited agreement has arrived.
The UAE has given in to increase production from August to balance supply and demand. The markets have not taken the news positively and have pushed the prices of the barrel down.
OPEC and its allies decided to end the policy of production cuts that supported the prices. Between August and December, an increase of 400,000 barrels per day is expected each month by Iraq, Kuwait, Russia, Saudi Arabia and the UAE.
According to the group, the decision is based on clear signs of oil demand improvement. OPEC expects global demand to exceed 100 million barrels a day for the first time next year.
After 2020, which has been a nightmare for oil-producing countries, Brent crude has advanced 43%. Compared to summer 2020, it has gained a substantial 60% rise.
Natural gas is cheaper today
Natural gas prices posted moderate losses on Tuesday. The market participants increased their short bets, as seen by the open interest.
On the MCX, July natural gas delivery contracts slid by 0.39%, or Rs 1.10, to Rs 281.20 per mmBtu. Gas delivery for August dropped by 0.39%, or Rs 1.10, to Rs 279.70 per mmBtu.
MCX iCOMDEX Natural Gas Index yielded 0.36% or 12.22 points, to 3,419.52.
The commodity prices have been trading with a bullish trend for the past few weeks, supported by hot weather on the West Coast and midWest of the US. The gas price had soared 2.9% yesterday on the NYMEX.
However, the sign of increasing production has weighed on the commodity value. On the other hand, there have been concerns that growing prices may cause power generations to turn to coal.
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