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Crude oil futures traded lower on Wednesday morning as data showed that Chinese manufacturing activity contracted for the fourth straight month in January.
At 9.53 am on Wednesday, April Brent oil futures were at $82.21, down by 0.35 per cent, and March crude oil futures on WTI (West Texas Intermediate) were at $77.56, down by 0.33 per cent.
February crude oil futures were trading at ₹6,446 on the Multi Commodity Exchange (MCX) during initial trading, against the previous close of ₹6,478, down by 0.49 per cent, and March futures were trading at ₹6,456, as against the previous close of ₹6485, down by 0.45 per cent.
Deflationary pressures
Chinese Manufacturing PMI (purchasing managers’ index) was at 49.2 in January 2024, against 49.0 in December. However, this was the fourth straight month of contraction in manufacturing activity. Market reports attributed deflationary pressures and weak global demand for this contraction.
Weak economic growth in China has impacted demand for commodities such as crude oil. China is a major consumer of crude oil in the global market.
Meanwhile, the market is also awaiting the outcome of the Federal Open Market Committee meeting of the US Federal Reserve later in the day. Though the Fed is expected to keep interest rates unchanged, it is also looking for clues on the proposed rate cuts. The US is a major consumer of crude oil, and any cut in interest rates will help boost prices of the commodity.
On the demand side, data from the American Petroleum Institute (API) showed a decline of 2.5 million barrels in crude oil inventories in the week ending January 26. The market was expecting the decline to be around 0.86 million barrels during the week.
Turmeric gains, guar gum slips
February natural gas futures were trading at ₹174.20 on MCX, against the previous close of ₹173.90, up by 0.17 per cent.
On the National Commodities and Derivatives Exchange (NCDEX), April turmeric (farmer polished) contracts were trading at ₹14,850, against the previous close of ₹14,830, up by 0.13 per cent.
February guar gum futures were trading at ₹9,965 on NCDEX in the initial trading hour of Wednesday morning, against the previous close of ₹9,985, down by 0.20 per cent.
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