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Crude oil traded higher on Tuesday morning as the market is awaiting February’s PMI (Purchasing Managers’ Index) data from major oil consumers such as the US and China.
At 9.53 am on Tuesday, May Brent oil futures were up by 0.21 per cent at $82.21 and April crude oil futures on WTI were up by 0.32 per cent at $75.92.
March crude oil futures were trading at ₹6,295 on Multi Commodity Exchange (MCX) during initial trading against the previous close of ₹6,273, up by 0.35 per cent, and April futures were trading at ₹6,337 against the previous close of ₹6,317, up by 0.32 per cent.
Contraction likely in US
Regarding the US PMI data, market reports said the manufacturing activity in the US is likely to remain in the contraction territory during February. This is in spite of the growth in the service sector.
On Monday, US Federal Reserve Governor Philip Jefferson said that inflation remains stubbornly high for a broad array of services in the US. Speaking at an economics class at Harvard University, he said core goods inflation has started to come down, and several indicators suggest that housing services inflation is likely to come down in the coming months.
“There is more uncertainty surrounding inflation in core services, excluding housing,” Jefferson said. To a query, Jefferson said he was under no illusion that inflation would return quickly to the target of 2 per cent. Inflation is still a concern for the US.
The US Federal Reserve had resorted to aggressive interest rate hikes to control inflation in that country. Such rate hikes would make the commodities such as crude oil costlier than buying in other currencies impacting the demand for the commodity.
Meanwhile, February PMI data for China is expected to be released on Wednesday. However, China had shown signs of recovery in January. February PMI data will show how the growth momentum is taking shape in that economy.
After witnessing strict Covid control measures for several months, China relaxed the norms at the beginning of this year. Apart from affecting the economy of China, the strict Covid control measures had also affected the demand for crude oil in the global market.
Dhaniya, guar gum gain
March aluminium futures were trading at ₹208.15 on MCX in the initial trading hour of Tuesday morning against the previous close of ₹209.50, down by 0.64 per cent.
On the National Commodities and Derivatives Exchange (NCDEX), April dhaniya contracts were trading at ₹7,056 during initial trading against the previous close of ₹6,940, up by 1.67 per cent.
March guar gum futures were trading at ₹12,150 on NCDEX in the initial trading hour of Tuesday morning against the previous close of ₹12,074, down by 0.63 per cent.
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