Crude oil heads for weekly gains on strong US economic data 

Crude oil futures, which traded lower on Friday morning, were still on tracks for the weekly gains as the recent economic data from the US ignited hopes of interest rate cut in September.

At 9.53 am on Friday, October Brent oil futures were at $80.77, down by 0.33 per cent, and September crude oil futures on WTI (West Texas Intermediate) were at $77.81, down by 0.45 per cent.

August crude oil futures were trading at ₹6537 on Multi Commodity Exchange (MCX) during the initial hour of trading on Friday against the previous close of ₹6487, up by 0.77 per cent, and September futures were trading at ₹6447 against the previous close of ₹6401, up by 0.72 per cent.

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According to the Census Bureau of the US Commerce Department, retail sales in the US increased by 1 per cent in July against a decline of 0.2 per cent in June. Market was forecasting it to grow by 0.4 per cent. Growth in retail sales during July indicated that consumer spending remained strong during the period.

Data released by the US Labour Department showed initial claims for unemployment benefits declined by 7,000 to 227,000 for the week ending August 10.

These two data, along with the recent numbers on consumer price index and producer price index in the US, allayed fears of recession in that country, and indicated improvement in economic activities.

These numbers also ignited hopes of 50 basis point interest rate cut by the US Federal Reserve in September.

An improvement in economic activities and a reduction in interest rate will help boost demand for commodities such as crude oil. US is a major consumer of crude oil in the world market.

Meanwhile, the official data indicated an increase in crude oil inventories in the US for the week ending August 9. According to US EIA (Energy Information Administration), US commercial crude oil inventories increased by 1.4 million barrels for the week ending August 9. At 430.7 million barrels, US crude oil inventories were about 5 per cent below the five-year average for this time of year. Total motor gasoline inventories decreased by 2.9 million barrels from last week and were about 3 per cent below the five-year average for this time of year.

August zinc futures were trading at ₹261.50 on MCX during the initial hour of trading on Friday against the previous close of ₹257.15, up by 1.69 per cent.

On the National Commodities and Derivatives Exchange (NCDEX), August jeera contracts were trading at ₹26410 in the initial hour of trading on Friday against the previous close of ₹26655, down by 0.92 per cent.

August turmeric (farmer polished) futures were trading at ₹15000 on NCDEX in the initial hour of trading on Friday against the previous close of ₹15210, down by 1.38 per cent.