The recent increase in crude oil futures following the US government’s avoidance of a shutdown has brought some relief to the market. With Brent oil futures trading at $72.93 and WTI crude oil futures at $69.86, the market seems to be stabilizing. On the Multi Commodity Exchange, January crude oil futures were trading at ₹5,961, up by 0.39%, while February futures were at ₹5,954, up by 0.51%.
The fears of a potential shutdown were averted when the US Congress passed a spending legislation, providing government funding until March. This news was well-received by market participants as it eliminated the uncertainty that could have impacted travel and, subsequently, the demand for commodities like crude oil.
Additionally, the latest PCE price index data in the US showed lower-than-expected numbers for November, raising hopes of further rate cuts in 2025. This could potentially boost demand for commodities like crude oil. On the other hand, concerns of a trade war between the US and the European Union emerged after President-elect Donald Trump warned of tariffs if the EU did not increase purchases of oil and gas from the US.
In other commodity news, January natural gas futures were up by 2.54% on MCX, while January jeera contracts and guarseed futures on NCDEX also saw positive gains.
Overall, the recent developments in the market point towards a more stable environment for crude oil futures, with the avoidance of a government shutdown and potential rate cuts in the US contributing to the positive sentiment. It will be interesting to see how these factors continue to shape the commodity market in the coming days.
