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Crude oil futures traded lower on Tuesday morning as the Chinese data showed a decline in factory and retail activities. Added to this, the reported statement of the Saudi oil producer to increase crude oil output, if needed, also impacted the prices.
At 10.02 am on Tuesday, October Brent oil futures were at $94.26, down by 3.96 per cent; and September crude oil futures on WTI were at $88.83, down by 0.65 per cent.
August crude oil futures were trading at ₹7,082 on Multi Commodity Exchange (MCX) in the initial hour of Tuesday morning against the previous close of ₹7,359, down by 3.76 per cent; and September futures were trading at ₹7,059 as against the previous close of ₹7,331, down by 3.71 per cent.
On Monday, China’s central bank reduced the interest rates to revive demand. This followed the release of National Bureau of Statistics (NBS) data that showed a slow down in the economy following the zero-Covid policy of the Chinese government and the property crisis in that country.
Growth slackening
According to the NBS data, Chinese industrial output showed year-on-year growth of 3.8 per cent in July. However, this was below the 3.9 per cent growth that was witnessed in June this year. Retail sales showed a growth of 2.7 per cent in July. However, it was below 3.1 per cent growth, which was witnessed in June this year.
China is a major consumer of crude oil in the global market.
Meanwhile, Saudi Aramco, a major crude oil producer in the global market, said it is ready to increase the crude oil output up to 12 million barrels a day if the Saudi government asks it to do so. However, the recent meeting of the Organization of Petroleum Exporting Countries (OPEC), of which Saudi is a major leader, had said that no output increases were planned.
This statement comes at a time when the market is hopeful of the revival of the 2015 nuclear deal by Iran. The revival of the deal would add a supply of crude oil to the global market. The deal would help lift sanctions on Iranian oil by the western nations.
It may be mentioned here that Iran responded to the EU’s proposal for reviving the nuclear deal by asking the US to show a ‘realistic approach and flexibility’ to resolve the remaining issues in the deal.
Cotton gains, dhaniya loses
August cotton futures were trading at ₹49,560 on MCX in early trades against the previous close of ₹48,590, up by 2 per cent.
On the National Commodities and Derivatives Exchange (NCDEX), August cottonseed oilcake futures were trading at ₹2,710 in the initial hour of Tuesday morning against the previous close of ₹2,672, up by 1.42 per cent.
September dhaniya contracts were trading at ₹11,554 on NCDEX on Tuesday against the previous close of ₹11,634, down by 0.69 per cent.
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