Crude oil futures traded lower on Monday as one of the its main markets—China—is witnessing Lunar New Year holiday.
At 10 am on Monday, March Brent oil futures were at $87.25, down by 0.43 per cent, while March crude oil futures on WTI were at $81.33, down by 0.38 per cent.
February crude oil futures were trading at ₹6,603 on Multi Commodity Exchange (MCX) in the initial trading hour of Monday morning against the previous close of ₹6,620, down by 0.26 per cent; and March futures were trading at ₹6,644 as against the previous close of ₹6,663, down by 0.29 per cent.
Trading volumes were thin as China is witnessing the Lunar New Year holiday. The market is likely to witness slim volumes for the rest of the week due to the holiday in China.
However, increase in the travel during the Chinese Lunar New Year holiday is expected to boost the demand for the commodity. China had followed stringent Covid control measures, including the restriction on movement of public, impacting the economy. Market expects that reopening of economy would help boost the crude oil market as China is a major consumer of the commodity in the global market.
Meanwhile, Fatih Birol, Executive Director of the International Energy Agency (IEA), said in an interview to a news outlet that energy markets could tighten this year if the Chinese economy rebounds the way financial institutions expect.
Though currently there is no tightness in the market, there are uncertainties to watch out for, namely Chinese demand and Russian supply, he said in the interview.
Dhaniya, jeera fall
February natural gas futures were trading at ₹259.40 on MCX in the initial trading hour of Monday morning against the previous close of ₹257.20, up by 0.86 per cent.
On the National Commodities and Derivatives Exchange (NCDEX), April dhaniya contracts were trading at ₹8,134 in the initial trading hour of Monday morning against the previous close of ₹8,354, down by 2.63 per cent.
March jeera futures were trading at ₹33,745 on NCDEX in the initial trading hour of Monday morning against the previous close of ₹34,270, down by 1.53 per cent.