Crude oil prices traded lower on Wednesday morning following weak data from China, a major oil consumer.

At 9.54 am on Wednesday, August Brent oil futures were at $75.96, down by 0.43 per cent; and July crude oil futures on WTI were at $71.46, down by 0.39 per cent.

June crude oil futures were trading at ₹5,906 on Multi Commodity Exchange (MCX) in early trade against the previous close of ₹5,939, down by 0.56 per cent; and July futures were trading at ₹5,938 as against the previous close of ₹5,966, down by 0.47 per cent.

China’s weak economic growth

China’s trade balance came down to $65.81 billion in May against $90.21 billion in June. May’s trade balance numbers were below the market expectations.

Exports from China were down by 7.5 per cent in May against a growth of 8.5 per cent in April. Imports saw a decline of 4.5 per cent in May against a decline of 7.9 per cent in April.

All these data showed weak economic growth in one of the main crude oil importers of the world. A slowdown in China’s economy will impact the demand for crude oil also.

Oil markets outlook

However, the short-term energy outlook, which was released by the US EIA (Energy Information Administration) on Tuesday, forecasted the fall in the global oil inventories in the next five quarters.

On the global oil markets outlook, the report said: “Following the OPEC+ announcement on June 4 to extend crude oil production cuts through 2024, we forecast global oil inventories to fall slightly in each of the next five quarters. We expect these draws will put some upward pressure on crude oil prices, notably in late-2023 and early-2024. We forecast the Brent crude oil spot price will average $79 per barrel in the second half of 2023 and $84 a barrel in 2024.”

On the global oil consumption, the report said it expects global liquids fuels consumption would rise by 1.6 million barrels a day in 2023 from an average of 99.4 million barrels a day last year. “Consumption in our forecast grows by an additional 1.7 million barrels per day in 2024. Most of this growth comes from non-OECD countries,” the report said.

Jeera up, dhaniya falls

June natural gas futures were trading at ₹187.40 on MCX in the initial trading hour of Wednesday morning against the previous close of ₹186.30, up by 0.59 per cent.

On the National Commodities and Derivatives Exchange (NCDEX), June jeera contracts were trading at ₹46,070 in initial trading against the previous close of ₹45,935, up by 0.29 per cent.

June dhaniya futures were trading at ₹5,996 on NCDEX against the previous close of ₹5,952, down by 0.74 per cent.