Crude oil futures edged higher during early trade on Monday as participants increased their bets on the back of strong spot demand. On the Multi Commodity Exchange (MCX), the July delivery contract of crude oil was trading at Rs 6,548 per barrel, up by Rs 30, or 0.46 percent, from the previous close.
Reasons for Price Increase
Analysts attributed the price rise to a pick-up in spot demand from consuming industries and refineries. Additionally, positive cues from global markets supported the uptrend. Globally, West Texas Intermediate (WTI) crude oil was trading higher at $82.17 per barrel, up 0.32 percent, while Brent crude oil was at $85.78 per barrel, up 0.28 percent.
Market Sentiment
The market sentiment remained bullish amid expectations of higher demand during the summer driving season in the United States and Europe. Furthermore, ongoing geopolitical tensions in the Middle East added a risk premium to oil prices. Traders also awaited the weekly inventory data from the American Petroleum Institute (API) and the Energy Information Administration (EIA) for further direction.
In the domestic market, crude oil futures have been volatile in recent weeks due to fluctuations in global prices and uncertainty over demand recovery. However, the current uptick suggests that market participants are optimistic about near-term demand prospects.
