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Crude oil futures traded lower on Tuesday morning following signs of economic slowdown in China.
At 9.53 am on Tuesday, September Brent oil futures were at $84.62, down by 0.27 per cent, and September crude oil futures on WTI (West Texas Intermediate) were at $80.59, down by 0.31 per cent.
July crude oil futures were trading at ₹6,828 on Multi Commodity Exchange (MCX) during the initial hour of trading on Tuesday against the previous close of ₹6,847, down by 0.28 per cent, and August futures were trading at ₹6,752 against the previous close of ₹6,770, down by 0.27 per cent.
China’s 4.7 per cent GDP growth for the second quarter of 2024 was below market expectations of 5.1 per cent; it was 5.3 per cent in the previous quarter.
Data showed China’s oil imports declined in June due to weak demand. Refinery output declined by 3.7 per cent. Planned maintenance of refineries, lower processing margins, and decrease in demand for products were cited as the reasons for this decline.
China is the second largest consumer of crude oil in the global market.
US rate cut
Meanwhile, the statement of US Federal Reserve chair Jerome Powell on Monday ignited hopes of interest rate cut in the US in the coming months.
“In the second quarter, actually, we did make some more progress on taming inflation. We’ve had three better readings, and if you average them, that’s a pretty good place,” he said at the Economic Club of Washington.
“What we’ve said is that we didn’t think it would be appropriate to begin to loosen policy until we had greater confidence that inflation was returning sustainably to 2 per cent. We’ve been waiting on that. And I would say that we didn’t gain any additional confidence in the first quarter, but the three readings in the second quarter, including the one from last week, do add somewhat to confidence.”
Market reports noted that the prospect of lower interest rates would help boost demand for oil in the global market.
Natural gas futures
July natural gas futures were trading at ₹180.30 on MCX during the initial hour of trading on Tuesday, against the previous close of ₹185.30, down by 2.70 per cent.
On the National Commodities and Derivatives Exchange (NCDEX), August turmeric (farmer polished) contracts were trading at ₹15,580 in the initial hour of trading on Tuesday, against the previous close of ₹15,490, up by 0.58 per cent.
July jeera futures were trading at ₹26,170 on NCDEX in the initial hour of trading on Tuesday, against the previous close of ₹26,390, down by 0.83 per cent.
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