Crude oil traded higher on Tuesday morning following the US government’s plans to refill its strategic petroleum reserve (SPR). The US is a major consumer of crude oil in the global market.

At 9.54 am on Tuesday, July Brent oil futures were at $75.56, up by 0.44 per cent, and June crude oil futures on WTI were at $71.39, up by 0.39 per cent.

May crude oil futures were trading at ₹5,874 on the Multi Commodity Exchange (MCX) during initial trading, against the previous close of ₹5,863, up by 0.19 per cent, and June futures were trading at ₹5,894, as against the previous close of ₹5,884, up by 0.17 per cent.

On Monday, the US Department of Energy announced plans to buy 3 million barrels of crude oil for the SPR for delivery in August. According to the US Department of Energy, the offers will have to be submitted by May 31.

The US government sold around 180 million barrels of crude oil from the SPR last year. The move was aimed at bringing downcrude oil prices, which had gone up significantly following the war between Russia and Ukraine.

Another factor that helped the price of crude oil was the wildfires in Canada’s main oil-producing regions, which indicated a potential disruption in oil flows. However, weak Chinese data limited a further increase in the price.

China’s double whammy

Manish Chowdhury, Head of Research at Stoxbox, said China’s industrial production grew less-than-expected by 5.6 per cent in April, compared to 3.9 per cent growth in the previous month, as the country grappled with the double-whammy of declining local and overseas demand. A large increase in April can be attributed to the low base in the previous year as Shanghai, which is the epicentre of commercial activities, was under a strict Covid lockdown in April 2022. “The wide miss from an expected 10.9 per cent rise raises doubts over the actual reopening in China, along with the pace of post-Covid economic activity in the second largest economy in the world. We expect moderation in economic numbers going forward as the momentum from China’s pent-up demand fades away,” he said.

May copper futures were trading at ₹725.35 on MCX in the initial trading hour of Tuesday morning, against the previous close of ₹728.10, down by 0.38 per cent.

Jeera, guarseed decline

On the National Commodities and Derivatives Exchange (NCDEX), May jeera contracts were trading at ₹44,080 in the initial trading hour of Tuesday morning, against the previous close of ₹45,915, down by 4 per cent.

May guarseed futures were trading at ₹5,610 on NCDEX in the initial trading hour of Tuesday morning, against the previous close of ₹5,672, down by 1.09 per cent.

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