Crude oil futures traded flat on Monday morning following weak economic data from China and amid expectations of an interest rate cut by the US Federal Reserve later this week.

At 9.56 am on Monday, November Brent oil futures were at $71.58, down by 0.03 per cent, and November crude oil futures on WTI (West Texas Intermediate) were at $67.78, up by 0.04 per cent.

September crude oil futures were trading at ₹5772 on Multi Commodity Exchange (MCX) during the initial hour of trading on Monday against the previous close of ₹5770, up by 0.03 per cent, and October futures were trading at ₹5716 against the previous close of ₹5721, down by 0.09 per cent.

Data released by National Bureau of Statistics of China showed industrial production in that country failed to meet the market expectations.

China’s industrial production increased by 4.5 per cent in August against 5.1 per cent in July. Market was expecting it to be around 4.8 per cent. Latest industrial production data marked the fourth straight month of slowdown. Industrial production growth had reached a low of 4.5 per cent in March this year.

Retail sales in China expanded by 2.1 per cent year-on-year in August. However, it was below July’s 2.7 per cent growth. Market was expecting a growth of 2.5 per cent in August.

In their Commodities Feed, ING Think’s Warren Patterson, Head of Commodities Strategy, and Ewa Manthey, Commodities Strategist, said Chinese refiners processed around 12.6 million barrels a day of crude oil in August, down almost 10 per cent month-on-month and 17.5 per cent lower year-on-year.

The numbers suggest that apparent oil demand fell below 12.5 million barrels a day, down more than 15 per cent year-on-year and to its weakest level since August 2022.

The numbers also indicate that crude oil inventories in China built at a pace of around 3.2million barrels a day in August, the largest monthly build in Chinese crude oil inventories going as far back as 2015, they said.

Meanwhile, US Federal Reserve is likely to announce its decision on interest rate revision on Wednesday. Expectations in the market are that the Fed will reduce the interest rate by 25 to 50 basis points. A reduction in interest rate will make the commodity cheaper. This in turn will help boost demand for crude oil.

September natural gas futures were trading at ₹191.20 on MCX during the initial hour of trading on Monday against the previous close of ₹193.90, down by 1.39 per cent.

On the National Commodities and Derivatives Exchange (NCDEX), October dhaniya contracts were trading at ₹7108 in the initial hour of trading on Monday against the previous close of ₹7074, up by 0.48 per cent.

September castorseed futures were trading at ₹6242 on NCDEX in the initial hour of trading on Monday against the previous close of ₹6198, up by 0.71 per cent.

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