Crude oil futures traded higher on Friday morning following reports that Iran intends to ban US and Israeli ships from transiting the Strait of Hormuz, according to The Hindu BusinessLine. At 10.02 am on Friday, October Brent oil futures were at $83.91, up 1.72 per cent, and September crude oil futures on WTI (West Texas Intermediate) were at $78.44, up 1.49 per cent, the report said.
Prices rally on Hormuz transit ban reports
Multi Commodity Exchange (MCX) crude oil contracts also moved up during the initial hour of trading on Friday, The Hindu BusinessLine reported. August futures were at ₹7,488 against the previous close of ₹7,377, up 1.50 per cent, while September futures traded at ₹7,402 against the previous close of ₹7,295, up 1.47 per cent.
| Contract | Exchange | Price | Change |
|---|---|---|---|
| October Brent | ICE | $83.91 | +1.72% |
| September WTI | — | $78.44 | +1.49% |
| August crude oil | MCX | ₹7,488 | +1.50% |
| September crude oil | MCX | ₹7,402 | +1.47% |
The rally extended a strong Thursday session. In their Commodities Feed for Friday, Warren Patterson, Head of Commodities Strategy of ING Think, and Ewa Manthey, Commodities Strategist, said oil prices rallied on Thursday, with ICE Brent settling 3.8 per cent higher on the day, taking it back above $82 a barrel.
ING strategists see little room for compromise
ING's commodity strategists pointed to the latest developments as evidence of friction in US-Iran negotiations. 'Developments over the last 24 hours or so demonstrate once again that negotiations between the US and Iran are unlikely to proceed smoothly,' they wrote.
According to The Hindu BusinessLine, the reported measures Iran is seeking include:
- A ban on US and Israeli ships transiting the Strait of Hormuz
- Compensation from hostile countries before they can use the strait again
- Fees for ships transiting the strait, in the form of service fees rather than a toll
'There doesn't seem to be much of a compromise, which ultimately makes it more difficult to reach a sustainable deal,' Patterson and Manthey said.
Despite clear signs of progress in recent days, the tenor of the rhetoric and growing distrust between the US and Iran mean things could go from bad to worse once again, they added. The strategists maintained their view that flows will start to normalise through the third quarter, leaving them expecting Brent to average $80 a barrel this quarter, while acknowledging 'plenty of risk and uncertainty' to that view.
Trump says war with Iran to end 'pretty soon'
Speaking to reporters on Thursday, US President Donald Trump said the war with Iran would be over soon. 'I think it's going to end pretty soon. I don't think they can go much longer,' he said, according to The Hindu BusinessLine. Asked about munitions stockpiles, Trump said: 'We have certain types of munitions that are very powerful, that we have unlimited, virtual unlimited supply. We have others where it's a little bit tighter.'
Other commodities: aluminium, turmeric and dhaniya
Elsewhere on Indian commodity exchanges:
- August aluminium futures on MCX were trading at ₹352.40 against the previous close of ₹349.20, up 0.92 per cent.
- On the National Commodities and Derivatives Exchange (NCDEX), August turmeric (farmer polished) contracts were trading at ₹20,686 against the previous close of ₹21,546, down 3.99 per cent.
- August dhaniya futures were at ₹14,950 against the previous close of ₹15,026, down 0.51 per cent, the report said.
Sources:
