Despite the US averting a debt default after the leaders reached an agreement on debt ceiling, crude oil traded lower on Tuesday morning. Fears of a possible interest rate hike by the US Federal Reserve in June impacted the crude oil prices in the market.
At 9.51 am on Tuesday, August Brent oil futures were at $76.63, down by 0.61 per cent, and July crude oil futures on WTI were at $72.39, down by 0.39 per cent.
June crude oil futures were trading at ₹6,001 on the Multi Commodity Exchange (MCX), down by 0.58 per cent, and July futures were trading at ₹6,031 as against the previous close of ₹6,064, down by 0.54 per cent.
On Saturday, US President Joe Biden and Republican House Speaker Kevin McCarthy agreed in principle to suspend the $31.4 trillion government debt ceiling for the next two years. Following this, the US House Rules Committee will meet on Tuesday afternoon to discuss the debt ceiling bill. This bill needs the approval of the US Congress before June 5 to avert a debt default crisis.
Though the news of leaders reaching an agreement on the US debt ceiling enthused the market, the possible interest rate hike by the US Fed Reserve to control inflation impacted the price of the commodity. The market is expecting the Fed Reserve to increase the interest rates in its June meeting. Any increase in the interest rates will impact economic growth and make the commodities, such as crude oil, costlier.
The market is also waiting for crucial data from the manufacturing and service sectors in China. The data is scheduled for release on Wednesday. These data will give an indication on the economic recovery in China.
Both the US and China are the major consumers of crude oil in the global market.
Jeera tops ₹45,500; castorseed slips
June zinc futures were trading at ₹210 on MCX against the previous close of ₹212.70, down by 1.27 per cent.
On the National Commodities and Derivatives Exchange (NCDEX), June jeera contracts were trading at ₹45,530 in the initial trading hour of Tuesday morning against the previous close of ₹45,305, up by 0.50 per cent.
June castorseed futures were trading at ₹5,572 on NCDEX against the previous close of ₹5606, down by 0.61 per cent.