Crude oil futures traded lower on Tuesday morning after China’s fiscal stimulus package failed to impress the market.

At 9.57 am on Tuesday, January Brent oil futures were at $71.77, down by 0.08 per cent, and December crude oil futures on WTI (West Texas Intermediate) were at $67.97, down by 0.10 per cent.

November crude oil futures were trading at ₹5745 on Multi Commodity Exchange (MCX) during the initial hour of trading on Tuesday against the previous close of ₹5762, down by 0.30 per cent, and December futures were trading at ₹5755 against the previous close of ₹5767, down by 0.21 per cent.

On Friday, China announced a debt swap package to support local governments in the coming years. This $1.6-trillion (10 trillion yuan) package did not enthuse the market as market players felt it would not provide direct support to the economy.

China did not announce any direct fiscal measures to help the property market and private consumption in that country. This lack of direct fiscal support measure to boost the economy created apprehensions over the demand for commodities such as crude oil in one of the major consumers in the world.

In their Commodities Daily feed, Warren Patterson, Head of Commodities Strategy of ING Think, and Ewa Manthey, Commodities Strategist, said oil prices came under further downward pressure on Monday. ICE Brent settled almost 2.8 per cent lower on the day, falling below $72 a barrel. The strength in the US dollar has provided strong headwinds not just to the oil market but also to the broader commodities complex, they said.

“Our oil balance through 2025 shows a surplus on the assumption that OPEC+ unwinds cuts as currently planned and that we do not see any dramatic changes to Iranian export volumes,” they said.

Stating that OPEC will release its monthly oil market report on Tuesday, they said there is the potential for further demand revisions from the group. Last month, OPEC cut its demand growth forecasts by 110,000 barrels a day and 100,000 barrels a day for 2024 and 2025, respectively. However, the group still estimates demand to grow by 1.93 million barrels a day this year and 1.74 million barrels a day next year, which is still very aggressive compared to other demand estimates, which are nearer 1 million barrels a day, they said.

November aluminium futures were trading at ₹236.85 on MCX during the initial hour of trading on Tuesday against the previous close of ₹238.45, down by 0.67 per cent.

On the National Commodities and Derivatives Exchange (NCDEX), December jeera contracts were trading at ₹25025 in the initial hour of trading on Tuesday against the previous close of ₹25220, down by 0.77 per cent.

November dhaniya futures were trading at ₹6946 on NCDEX in the initial hour of trading on Tuesday against the previous close of ₹6980, down by 0.49 per cent.

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