Crude oil futures traded lower on Tuesday morning as the market expressed concerns over the higher interest scenario in most of the major economies across the world.
At 9.50 am on Tuesday, December Brent oil futures were at $91.47, down by 0.45 per cent; and November crude oil futures on WTI (West Texas Intermediate) were at $89.32, down by 0.40 per cent.
October crude oil futures were trading at ₹7437 on Multi Commodity Exchange (MCX) in the initial trading hour of Tuesday morning against the previous close of ₹7469, down by 0.43 per cent; and November futures were trading at ₹7350 as against the previous close of ₹7376, down by 0.35 per cent.
Though the US Federal Reserve kept the interest rates unchanged at its meeting recently, it had indicated one more interest rate hike by the end of the year to control inflation in that economy. The European Central Bank had also highlighted its commitment to fight inflation recently. A higher interest rate scenario impacts the economic growth. This, in turn, impacts the demand for commodities such as crude oil.
On Monday, the rating agency Moody’s said that a government shutdown in the US would impact its credit. A month ago, Fitch had downgraded the US following the debt ceiling crisis.
Meanwhile, the decision of S&P Global and HSBC to downgrade outlook for Chinese economic growth this year also impacted the market. Such downgrades come at a time when the market is expecting the data on China’s purchasing managers’ index (PMI) for September. Though PMI data for August had shown some improvement in manufacturing activity, service sector growth had declined.
Zinc up, Guarseed down
October zinc futures were trading at ₹226 on MCX in the initial trading hour of Tuesday morning against the previous close of ₹224.75, up by 0.56 per cent.
On the National Commodities and Derivatives Exchange (NCDEX), October guarseed contracts were trading at ₹5783 in the initial trading hour of Tuesday morning against the previous close of ₹5814, down by 0.53 per cent.
October turmeric (farmer polished) futures were trading at ₹14006 on NCDEX in the initial trading hour of Tuesday morning against the previous close of ₹14078, down by 0.51 per cent.