Crude oil futures traded marginally higher on Tuesday morning as a private sector survey showed growth in China’s services activities.
At 9.53 am on Tuesday, February Brent oil futures were at $78, up by 0.04 per cent; and January crude oil futures on West Texas Intermediate (WTI) were at $73.06, up by 0.03 per cent.
December crude oil futures were trading at ₹6,113 on Multi Commodity Exchange (MCX) in the initial trading hour of Tuesday against the previous close of ₹6,157, down by 0.71 per cent; and January futures were trading at ₹6,154 as against the previous close of ₹6,207, down by 0.85 per cent.
Caixin/S&P Global services purchasing managers’ index (PMI) data showed increases in activity and demand across China’s service sector in November.
Caixin China General Services PMI press release said that the seasonally adjusted headline Caixin China General Services Business Activity Index rose from 50.4 in October to a three-month high of 51.5 in November.
The rate of growth was modest, however, and remained notably softer than the long-run series average. Nevertheless, the index has signalled an expansion of business activity across China’s service sector in each of the past 11 months, it said.
Quoting Wang Zhe, Senior Economist at Caixin Insight Group, the press release said services supply and demand expanded, as the market continued to heal. The gauges for business activity and total new orders were above 50 for the 11th consecutive month and hit three-month highs. However, some surveyed companies reported that the market improvement was slightly weaker than expected.
Employment shrank slightly, marking the first decline since January, with some companies adopting a cautious approach to hiring. This has led to increased backlogs of work, Wang Zhe said.
“Optimism in the services industry rebounded. The downward trend of the gauge for service providers’ expectations about future activity came to an end after four consecutive months of decline, moving up by more than 2 points. However, the reading remained relatively low compared to the historical average, indicating lingering concerns about the economic outlook,” Wang Zhe said.
China is a major consumer of crude oil. Any improvement in its economic activities will help boost demand for commodities such as crude oil.
Natural gas futures
December natural gas futures were trading at ₹225 on MCX in the initial trading hour of Tuesday against the previous close of ₹223.90, up by 0.49 per cent.
On the National Commodities and Derivatives Exchange (NCDEX), December jeera contracts were trading at ₹41,200 in the initial trading hour of Tuesday against the previous close of ₹41,475, down by 0.66 per cent.
December castor seed futures were trading at ₹5,806 on NCDEX in the initial trading hour of Tuesday against the previous close of ₹5,843, down by 0.63 per cent.