Crude oil traded lower on Monday morning as many major banks cut GDP growth forecast for China for 2023.
At 9.53 am on Monday, August Brent oil futures were at $75.50, down by 1.45 per cent, and August crude oil futures on WTI were at $70.94, down by 1.38 per cent.
July crude oil futures were trading at ₹5,837 on Multi Commodity Exchange (MCX) during initial trading against the previous close of ₹5877, down by 0.68 per cent, and August futures were trading at ₹5,863 as against the previous close of ₹5902, down by 0.66 per cent.
Impact of economic indicators
Many major banks, including Nomura, UBS, Standard Chartered, Bank of America and JP Morgan, have cut their GDP forecast for China for 2023.
Now these banks are forecasting the GDP growth of China to be between 5.1 per cent and 5.7 per cent for 2023, against their earlier forecast of 5.5 per cent to 6.3 per cent.
These forecasts follow the release of some economic indicators by China recently. These numbers were not on the expected lines, indicating the delay in the post-Covid economic recovery in that country.
Economic recovery in China assumes importance for the crude oil market as it is the second biggest consumer of the oil after the US.
Powell to testify on US economy
Meanwhile, the market is also now waiting for US Fed Chair Jerome Powell to testify before Congress during the week. Powell will testify on the economic outlook and recent monetary policy actions before the Joint Economic Committee.
Last week, Fed had paused the interest rate hike. However, it had indicated two more rate hikes are likely during the year. Any increase in interest rates will make crude oil costlier impacting the demand for the commodity. The US is a major consumer of crude oil in the world market.
June natural gas futures were trading at ₹212 on MCX against the previous close of ₹215.20, down by 1.49 per cent.
Jeera tops ₹50,000
On the National Commodities and Derivatives Exchange (NCDEX), June steel long contracts were trading at ₹49,250 against the previous close of ₹48,180, up by 2.22 per cent.
July jeera futures were trading at ₹50,160 on NCDEX against the previous close of ₹49,315, up by 1.71 per cent.