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Crude oil futures traded lower on Tuesday morning following weak economic data from China and weakening demand outlook from OPEC (Organisation of Petroleum Exporting Countries) for 2023.
At 10.02 am on Tuesday, January Brent oil futures were at $92.91, down by 0.25 per cent, and December crude oil futures on WTI were at $85.41, down by 0.54 per cent.
November crude oil futures were trading at ₹6,953 on Multi Commodity Exchange (MCX) in the initial trading hour of Tuesday morning against the previous close of ₹6,981, down by 0.40 per cent; and December futures were trading at ₹6,946, as against the previous close of ₹6,962, down by 0.23 per cent.
Impacting market sentiment
Two sets of data published by China impacted market sentiments. The Chinese National Bureau of Statistics data showed 5 per cent growth in industrial production for October against 6.3 per cent in September. The market had expected 5.2 per cent for October.
According to the bureau, retail sales in China declined by 0.5 per cent in October against a growth of 2.5 per cent in September. The market expected around 1 per cent growth for October.
The data indicated weakness in the Chinese economy. The country had resorted to lockdowns, testing, and so on, to control the spread of Covid-19. Its zero-Covid policy is impacting its economy. China is a major consumer of crude oil.
The OPEC Monthly Oil Market Report, released on November 14, projected a decline in world oil demand for 2023.
The report revised down the demand growth forecast for 2022 by 0.1 million barrels a day to 2.5 million barrels a day. It said the second quarter of this year was revised slightly higher amid better-than-anticipated oil demand. However, oil demand in the third and fourth quarter of 2022 was revised lower due to the zero-Covid policy in China, ongoing geopolitical uncertainties, and weaker economic activities.
For 2023, the global oil demand growth forecast is revised down by 0.1 million barrels a day to 2.2 million barrels a day. Oil demand growth is anticipated to be challenged by economic uncertainties, Covid containment measures, and geopolitical developments, the report said.
Lead, steel, dhaniya gain
November lead futures were trading at ₹186.75 on MCX in the initial trading hour of Tuesday morning against the previous close of ₹185.25, up by 0.81 per cent.
On the National Commodities and Derivatives Exchange (NCDEX), November steel long contracts were trading at ₹45,770 in the initial trading hour of Tuesday morning against the previous close of ₹44,280, up by 3.36 per cent.
November dhaniya futures were trading at ₹11,030 on NCDEX in the initial trading hour of Tuesday morning against the previous close of ₹10,974, up by 0.51 per cent.
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