Crude oil traded lower on Thursday morning as weak industrial production and retail sales data from China left the market disappointed. China is a major consumer of crude oil in the world market.

At 9.53 am on Thursday, August Brent oil futures were at $73, down by 0.27 per cent, and July crude oil futures on WTI were at $68.08, down by 0.28 per cent.

June crude oil futures were trading at ₹5599 on Multi Commodity Exchange (MCX) during initial trading against the previous close of ₹5664, down by 1.15 per cent; and July futures were trading at ₹5,642 as against the previous close of ₹5,701, down by 1.03 per cent.

China’s central bank moves

China’s industrial production and retail sales data for May that were released on Thursday showed that these sectors grew less than April and below the market expectations.

China’s industrial production grew by 3.5 per cent in May against 5.6 per cent in April. Retails sales in China went up by 12.7 per cent in May against 18.4 per cent in April.

To boost the economic growth, China’s central bank reduced interest rates on its medium-term loans. Earlier this week, it had also reduced interest rates on short-term loans.

Though the decision to reduce interest rates was aimed at boosting China’s economy, weak industrial production and retail sales data created apprehensions on China leading the demand for crude oil in the world market.

Two more US Fed hikes?

The US Federal Reserve paused interest rate hikes in its June meeting. However, it indicated two more interest rate hikes by the end of the year. Market analysts are of the opinion that the indication of two more rate hikes could impact the demand for crude oil in the coming days.

Meanwhile, the petroleum status report by the US EIA (Energy Information Administration) for the week ending June 9, which was released on June 14, showed an increase in the crude oil inventories in the US, indicating a weak demand for the fuels in that country.

US commercial crude oil inventories (excluding those in the strategic petroleum reserve) increased by 7.9 million barrels from the previous week. Total motor gasoline inventories increased by 2.1 million barrels from last week. Both finished gasoline and blending components inventories increased last week.

US crude oil imports averaged 6.4 million barrels a day last week, a decrease of 19,000 barrels a day from the previous week.

Turmeric, castorseed rise

June natural gas futures were trading at ₹191.60 on MCX against the previous close of ₹193.10, down by 0.78 per cent.

On the National Commodities and Derivatives Exchange (NCDEX), August turmeric (farmer polished) contracts were trading at ₹8638 against the previous close of ₹8386, up by 3.01 per cent.

June castorseed futures were trading at ₹5588 on NCDEX against the previous close of ₹5700, down by 1.96 per cent.

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