Crude oil futures traded higher on Monday morning after the US President Donald Trump announced that tariffs would be imposed on steel and aluminium imports to the US.
At 9.56 am on Monday, April Brent oil futures were at $75.17, up by 0.68 per cent, and March crude oil futures on WTI (West Texas Intermediate) were at $71.43, up by 0.61 per cent.
February crude oil futures were trading at ₹6,283 on Multi Commodity Exchange (MCX) during the initial hour of trading on Monday against the previous close of ₹6,237; up by 0.74 per cent, and March futures were trading at ₹6280 against the previous close of ₹6,237; up by 0.69 per cent.
On Sunday, Trump said that 25 per cent tariffs will be imposed on steel and aluminium imports to the US. Canada, Mexico and Brazil are the largest exporters of steel to the US, followed by South Korea and Vietnam.
It is to be noted here that these metals play major role in oil industry’s infrastructure, as they are used in the construction of pipelines, storage tanks and other infrastructure. Tariffs on these metals could impact the energy companies, which, in turn, could impact the infrastructure and supply chain in the US oil industry.
Meanwhile, China has released inflation data for January. According to the National Bureau of Statistics of China, annual inflation rate of China rose to 0.5 per cent in January from 0.1 per cent in December. Market attributed this marginal growth to seasonal effects from the Lunar New Year at the end January.
China’s producer price index declined by 2.3 per cent year-on-year in January. It had witnessed a decline of 2.3 per cent in December also.
China is one of the major consumers of crude oil in the global market, and the weak economic recovery in that country could impact the demand for the commodities such as crude oil.
February natural gas futures were trading at ₹301.30 on MCX during the initial hour of trading on Monday against the previous close of ₹295, up by 2.14 per cent.
On the National Commodities and Derivatives Exchange (NCDEX), February guargum contracts were trading at ₹10,020 in the initial hour of trading on Monday against the previous close of ₹9,973; up by 0.47 per cent.
March jeera futures were trading at ₹20,135 on NCDEX in the initial hour of trading on Monday against the previous close of ₹20,305; down by 0.84 per cent.