Crude oil futures traded higher on Monday morning as the market hoped for an early interest rate cut in the US following the release of key data in that country.
At 9.54 am on Monday, September Brent oil futures were at $85.37, up by 0.44 per cent, and August crude oil futures on WTI (West Texas Intermediate) were at $81.90, up by 0.44 per cent.
July crude oil futures were trading at ₹6832 on Multi Commodity Exchange (MCX) during initial trading on Monday morning against the previous close of ₹6805, up by 0.40 per cent, and August futures were trading at ₹6775 against the previous close of ₹6748, up by 0.40 per cent.
Demand booster
The PCE price index data showed a slight easing of inflation in the US in May. According to the US Department of Commerce, PCE price index stood at 2.6 per cent during May against 2.7 per cent in April. This led to the hopes in the market that the US Federal Reserve may resort interest rate cut in September.
A reduction in interest rate cut will make crude oil cheaper in the market thus boosting its demand in the world market as commodities such as crude oil are traded in dollars.
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Meanwhile, the minutes of June meeting of the US Federal Reserve are expected on Wednesday.
However, the recent data on manufacturing activities in China led to apprehensions over the demand for the commodities such as crude oil from this major importer. According to China Logistics Information Centre, China’s PMI index was at 49.5 in June. In May also, China’s PMI index was at 49.5.
Weak economic growth could impact the demand for crude oil from this second largest importer in the world market.
Jeera gains, turmeric slips
July natural gas futures were trading at ₹214.70 on MCX against the previous close of ₹217.80, down by 1.42 per cent.
On the National Commodities and Derivatives Exchange (NCDEX), July jeera contracts were trading at ₹29140 in against the previous close of ₹29075, up by 0.22 per cent.
August turmeric (farmer polished) futures were trading at ₹16800 on NCDEX against the previous close of ₹16924, down by 0.73 per cent.