Crude oil futures traded higher on Monday morning as China reduced its lending rate in an effort to boost the economy.
At 9.56 am on Monday, September Brent oil futures were at $83.11, up by 0.58 per cent, and September crude oil futures on WTI (West Texas Intermediate) were at $79.05, up by 0.52 per cent.
August crude oil futures were trading at ₹6625 on Multi Commodity Exchange (MCX) during the initial hour of trading on Monday against the previous close of ₹6612, up by 0.20 per cent, and September futures were trading at ₹6565 against the previous close of ₹6553, up by 0.18 per cent.
The People’s Bank of China has reduced the one-year loan prime rate (LPR) by 10 basis points to 3.35 per cent. One-year LPR is the benchmark for most corporate and household loans. The five-year rate was reduced by 10 basis points to 3.85 per cent. This rate is a benchmark for property mortgages.
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The slowing economic growth in China has affected the demand for commodities such as crude oil in the world market. China is the second largest consumer of crude oil. China hopes to boost its economy with this reduction in LPR.
Media reports on the peace talks between Israel and Hamas also supported the crude oil prices. Reports said that Israel and Hamas are likely to broker a ceasefire during the week. Any such development would help bring stability in West Asia region, reducing the risks associated with supply of the commodity.
Meanwhile, the US President Joe Biden has decided not to seek re-election to the post of the President. He has endorsed his deputy Kamala Harris to fight against Donald Trump. Investors assessing the impact of this decision on the market.
The former US President Donald Trump has promised to increase oil production if he wins the second term.
August natural gas futures were trading at ₹185 on MCX during the initial hour of trading on Monday against the previous close of ₹181.50, up by 1.93 per cent.
On the National Commodities and Derivatives Exchange (NCDEX), August turmeric (farmer polished) contracts were trading at ₹16050 in the initial hour of trading on Monday against the previous close of ₹15876, up by 1.10 per cent.
August jeera futures were trading at ₹26790 on NCDEX in the initial hour of trading on Monday against the previous close of ₹26620, up by 0.64 per cent.