Crude oil traded marginally higher on Tuesday morning following the demand prospects for the commodity from various regions of the world.
At 10 am on Tuesday, February Brent oil futures were at $79.98, up by 0.23 per cent, and February crude oil futures on WTI were at $75.67, up by 0.38 per cent.
January crude oil futures were trading at ₹6,300 on Multi Commodity Exchange (MCX) in the initial trading hour of Tuesday morning against the previous close of ₹6,307, down by 0.11 per cent, and February futures were trading at ₹6,339 against the previous close of ₹6,340, down by 0.02 per cent.
US replenishing stocks
Market reports said demand prospects for crude oil have gone up following the gradual reopening of China, and the US government’s intention to replenish strategic petroleum reserves. However, the increase in prices was limited by apprehensions over a likely global economic slowdown next year and an increase in Covid cases.
A survey by London-based research company World Economics said business confidence in the Chinese service sector is at an all-time low, well below levels recorded during the first outbreak of Covid.
In manufacturing, the confidence index is slightly higher, but still at a 34-month low. Almost all component indexes in both manufacturing and service sectors are below 50, indicating business activity fell sharply in December, it said.
As China has been the world’s biggest growth engine for over 20 years, even a slowdown close to the zero mark, let alone a major recession, will inevitably reverberate around the world, and likely bring down growth rates in many countries, the World Economics survey said.
“In summary, the survey suggests strongly that the growth rate of the Chinese economy has slowed quite dramatically, and may be heading for recession in 2023,” it said.
Jeera, guarseed decline
December natural gas futures were trading at ₹484.90 on MCX in the initial trading hour of Tuesday morning against the previous close of ₹489.10, down by 0.86 per cent.
On the National Commodities and Derivatives Exchange (NCDEX), January jeera contracts were trading at ₹27,800 in the initial trading hour of Tuesday morning against the previous close of ₹28,005, down by 0.73 per cent.
January guarseed futures were trading at ₹6,030 on NCDEX in the initial trading hour of Tuesday morning against the previous close of ₹6085, down by 0.90 per cent.