Crude oil futures traded marginally lower on Tuesday morning as the latest data showed China’s services sector activity growth in August was less than market expectations.
At 9.52 am on Tuesday, November Brent oil futures were at $88.97, down by 0.03 per cent, and October crude oil futures on WTI (West Texas Intermediate) were at $85.96, down by 0.02 per cent.
September crude oil futures were trading at ₹7,119 on Multi Commodity Exchange (MCX) during initial trading, against the previous close of ₹7,109, up by 0.14 per cent; and October futures were trading at ₹7,056, as against the previous close of ₹7,048, up by 0.11 per cent.
Below expectations
Caixin General Services Purchasing Managers’ Index (PMI) in China stood at 51.8 in August, against 54.1 in July. The market was expecting it to be at 53.6 for August. According to Caixin Insights, August showed weakest number in the past eight months.
It noted that new export business from China fell for the first time since December. However, local demand in China helped keep the services PMI above the 50 range for August, it said.
Economic recovery in China, which is a major consumer of crude oil in the world market, is yet to gain momentum. However, the recent Caixin Manufacturing PMI data for August stood at 51 against the market forecast of 49.3. This helped boost market sentiments.
However, the prospect of further production cuts by the major crude oil producing nations supported the market. Russia had recently stated that it agreed with the other major producers on production cuts. Saudi Arabia, the major oil producer, is likely to extend its production cut by 1 million barrels a day to October also.
Mentha oil, guar complex gain
Major oil producers want to keep supplies tight to boost the price of the commodity.
September mentha oil futures were trading at ₹1,017 on MCX in the initial trading hour of Tuesday morning against the previous close of ₹1,012.80, up by 0.41 per cent.
On NCDEX, guar gum October futures were up 1.45 per cent at ₹13,477 a quintal. Guarseed October contracts gained by 1.29 per cent at ₹6,357 a quintal.
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