Crude oil futures traded lower early Friday on the strengthening of the dollar as the the US GDP rebounded in the third quarter.
At 10 am on Friday, December Brent oil futures were at $96.24, down by 0.74 per cent, and December crude oil futures on WTI were at $88.12, down by 1.08 per cent.
November crude oil futures were trading at ₹7,262 on Multi Commodity Exchange (MCX) in the early trade against the previous close of ₹7,362, down by 1.36 per cent; and December futures were trading at ₹7,198 as against the previous close of ₹7,289, down by 1.25 per cent.
According to the advance estimate released by the US Bureau of Economic Analysis (BEA), the real GDP of that country increased at an annual rate of 2.6 per cent during the third quarter of 2022. The US GDP decreased by 0.6 per cent in the second quarter of 2022.
What it reflects
A BEA news release said the increase in real GDP reflectes an increase in exports, consumer spending, non-residential fixed investment, federal, state and local government spending, which were partly offset by decreases in residential fixed investment and private inventory investment. Imports, which are a subtraction in the calculation of GDP, decreased, it said.
Market reports noted that the US GDP number was stronger than expected, thus helping boost the dollar. A stronger dollar makes commodities such as crude oil expensive for those holding other currencies.
In his daily market outlook, Prathamesh Mallya, AVP (Research, Non-Agri Commodities, and Currencies), Angel One Ltd, said: “Crude prices remain higher, given the tighter supplies and a pick up in demand from the largest importer, China.”
November natural gas futures were trading at ₹478.20 on MCX in the initial trading hour of Friday morning against the previous close of ₹484.60, down by 1.32 per cent.
On the National Commodities and Derivatives Exchange (NCDEX), November steel long contracts were trading at ₹47,920 in the initial trading hour of Friday morning against the previous close of ₹48,250, down by 0.68 per cent.
November dhaniya futures were trading at ₹11,588 on NCDEX in the initial trading hour of Friday morning against the previous close of ₹11,620, down by 0.28 per cent.