Crude oil futures traded lower on Wednesday morning, following weak economic data from China for July.
At 9.52 am on Wednesday, October Brent oil futures were at $84.66, down by 0.27 per cent, and September crude oil futures on WTI (West Texas Intermediate) were at $80.78, down by 0.26 per cent.
August crude oil futures were trading at ₹6,733 on the Multi Commodity Exchange (MCX) in the initial trading hour of Wednesday morning, against the previous close of ₹6,868, down by 1.97 per cent, and September futures were trading at ₹6,702, against the previous close of ₹6,829, down by 1.86 per cent.
Suspension of jobs data
China’s retail sales and industrial production have grown below market expectations. According to the National Bureau of Statistics of China, industrial production grew by 3.7 per cent in July, against market expectations of 4.4 per cent. In June, it had witnessed 4.4 per cent growth.
China’s retail sales grew by 2.5 per cent in July, against 3.1 per cent growth in June. The market was expecting growth at 4.5 per cent.
Added to this, China suspended the release of unemployment data for July. This had hit a high of 21.3 per cent in June.
China is a major consumer of crude oil in the world market, and these numbers show a weak economic recovery in that country. Such a slowdown would impact the demand for commodities such as crude oil.
Stronger retail sales data in China also created apprehensions over possible interest rate hikes by the US Federal Reserve during the year. Such rate hikes would make commodities such as crude oil pricier in the world market.
US stocks decline
However, a decline in crude oil inventories in the US limited a further fall in crude oil prices. According to the American Petroleum Institute, crude oil inventories in the US decreased by 6.2 million barrels for the week ending August 11. The market was expecting the decline at around 2.3 million barrels. Official data from the US EIA (Energy Information Administration) is expected later in the day.
August natural gas futures were trading at ₹221.70 on the MCX in the initial trading hour of Wednesday morning, against the previous close of ₹231.80, down by 4.36 per cent.