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Crude oil futures traded lower in early trade on rise in China’s Covid cases and a decline in its producer price index (PPI).
At 10 am on Wednesday, January Brent oil futures were at $94.94, down by 0.44 per cent, and December crude oil futures on WTI were at $88.39, down by 0.58 per cent.
November crude oil futures were trading at ₹7,221 on Multi Commodity Exchange (MCX) in the initial trade against the previous close of ₹7,364, down by 1.91 per cent; and December futures were trading at ₹7,183 as against the previous close of ₹7,307, down by 1.70 per cent.
Market fears
China, a major consumer of crude oil globally, has seen an increase in the number of Covid cases. Reports quoting China’s National Health Commission said it reported 8,335 new Covid cases on November 8. This increase in the number of cases has created apprehensions in the market over a probable lockdown in some parts of that country. It may be mentioned here that China has been practising a zero-Covid policy by resorting to measures such as testing, lockdowns, etc. and its increasing frequency may impact its economy.
The data of the National Bureau of Statistics of China on Wednesday showed a decline in PPI by 1.3 per cent during October against a gain of 0.9 per cent in September.
Market reports quoting API (American Petroleum Institute) said there was an increase of around 5.61 million barrels of crude oil inventories in the US for the week ending November 4 as against a decline of 6.53 million barrels in the previous week. Reports said the increase in the inventory indicates a weak demand.
However, the official petroleum status data from the US EIA (Energy Information Administration) is expected later on Wednesday.
Natural gas up, dhaniya down
November natural gas futures were trading at ₹509.30 on MCX in the initial trading hour of Wednesday morning against the previous close of ₹505, up by 0.85 per cent.
On the National Commodities and Derivatives Exchange (NCDEX), the November steel long contracts were trading at ₹46,610 in early trade against the previous close of ₹46,350, up by 0.56 per cent.
November dhaniya futures were trading at ₹10,820 on NCDEX in the initial trades against the previous close of ₹10,936, down by 1.06 per cent.
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