Crude oil futures traded lower on Monday morning as uncertainties related to economic recovery continued in China.
At 9.53 am on Monday, October Brent oil futures were at $86.06, down by 0.86 per cent, and September crude oil futures on WTI (West Texas Intermediate) were at $82.47, down by 0.87 per cent.
August crude oil futures were trading at ₹6,844 on Multi Commodity Exchange (MCX) in the initial trading hour of Monday morning against the previous close of ₹6,934, down by 1.30 per cent; and September futures were trading at ₹6,805 as against the previous close of ₹6,891, down by 1.25 per cent.
Lack of pace in development
China is one of the major consumers of crude oil in the global market, and the lack of pace in its economic recovery has been affecting the demand for crude oil. Now, the market is awaiting the release of data on China’s industrial production, retail sales and employment on Tuesday.
Meanwhile, the market is of the opinion that the stronger-than-expected producer inflation data in the US may lead to higher interest rates in that country. According to the market reports, the US Federal Reserve may be forced to hike the interest rate considering the inflation data.
An interest rate hike would make the dollar stronger. This in turn will impact the price of the commodities such as crude oil that are denominated in dollars.
Zinc futures slip
The recent report by the IEA (International Energy Agency) said the recent decisions of Saudi Arabia and Russia to bring down crude oil production output could lead to a reduction in crude oil inventories in the world market for the remaining part of the year. It also said that the crude oil demand across the world could reach 103 million barrels a day.
August zinc futures were trading at ₹215.55 on MCX in the initial trading hour of Monday morning against the previous close of ₹217.45, down by 0.87 per cent.