Crude oil futures traded below $78 a barrel on Wednesday morning. While the US, one of the major consumers of crude oil, showed an increase in crude oil inventories; Moody’s downgraded China’s rating from stable to negative. China is another major consumer of crude oil in the world market.
At 9.52 am on Wednesday, February Brent oil futures were at $77.23, up by 0.04 per cent; and January crude oil futures on WTI (West Texas Intermediate) were at $72.31, down by 0.01 per cent.
December crude oil futures were trading at ₹6046 on Multi Commodity Exchange (MCX) in the initial trading hour of Wednesday morning against the previous close of ₹6080, down by 0.56 per cent; and January futures were trading at ₹6097 as against the previous close of ₹6129, down by 0.52 per cent.
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According to the American Petroleum Institute (API), crude oil inventories in the US increased by 594,000 barrels for the week ending December 1 as against a decrease of 817,000 barrels in the previous week. The market was expecting crude oil inventories to decline by 2.26 million barrels for the week ending December 1.
However, the official data on crude oil inventories will be released by US EIA (Energy Information Administration) later in the day. US is a major consumer of crude oil in the global market.
Meanwhile, the rating agency Moody’s has lowered China’s A1 debt rating from ‘stable’ to ‘negative’. Moody’s cited ‘increased risks related to structurally and persistently lower medium-term economic growth and the ongoing downsizing of the property sector’ for this downgrade.
The recent economic indicators had indicated that China’s economy is struggling to recover. There were also reports that China has built up its crude oil inventories during this year.
All these factors could impact the demand for crude oil in world’s second biggest market, as China is a major consumer of the commodity.
December natural gas futures were trading at ₹225.40 on MCX in the initial trading hour of Wednesday morning against the previous close of ₹228, down by 1.14 per cent.
On the National Commodities and Derivatives Exchange (NCDEX), December turmeric (farmer polished) contracts were trading at ₹12862 in the initial trading hour of Wednesday morning against the previous close of ₹12636, up by 1.79 per cent.
January jeera futures were trading at ₹39670 on NCDEX in the initial trading hour of Wednesday morning against the previous close of ₹39390, down by 0.71 per cent.